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SAN FRANCISCO PUBLIC LIBRARY 



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HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MARCH 10, 1993 
1:53 P.M. 



DOCUMENTS DEPT. 

APR 5 1993 

S , FRANCISCO 
PUBLIC LIBRARY 



222-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 10, 1993 
1:53 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



4 49386 SFPL: ECONO JRS 
88 SFPL 07/07/03 14 



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APPEARANCES 
MEMBERS PRESENT 
SENATOR WILLIAM CRAVEN, Vice Chair 
SENATOR RUBEN AYALA 
SENATOR NICHOLAS PETRIS 

MEMBERS ABSENT 
SENATOR DAVID ROBERTI, Chair 
SENATOR ROBERT BEVERLY 

STAFF PRESENT 
CLIFF BERG, Executive Officer 

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i| PAT WEBB, Committee Secretary 

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RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 
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ALSO PRESENT 

RICHARD P. GANNON, Member 

Workers ' Compensation Appeals Board 

KINGSTON W. PRUNTY, JR., Warden 
Sierra Conservation Center 
Department of Corrections 

HECTOR LOZANO 

Chicano Correctional Workers Association 

j CAROL A. PINKINS, Associate Warden 
Sierra Conservation Center 

EDWARD L. DAVISON, Correctional Lieutenant 
Department of Corrections 

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LARRY G. CARGILL, Correctional Lieutenant 
Supervisor Coalition 
Sierra Conservation Center 

JOHN SEYMOUR, Executive Director 
California Housing Finance Agency 



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INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

RICHARD P. GANNON, Member 

Workers' Compensation Appeals Board 1 

Background and Experience 1 

Questions by SENATOR PETRIS re: 

All Problems in California Caused by- 
Worker's Comp System 3 

Impact of Making Commission of Fraud 

Anywhere in System a Felony 5 

Age of Average Case 7 

Questions by SENATOR AYALA re: 






Necessity for Attorneys in Workman's 

14 Comp Cases 8 

15 High Costs of Workers ' Comp Coverage 9 

16 Stress Claims 9 

17 Recommendation on Fair Percentage for 
Job-related Stress 12 

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Statement by SENATOR PETRIS re: 

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Vetoed Bill of Last Year which Would Have 
20 Changed Stress Requirement 16 



Motion to Confirm 17 



-- Committee Action 17 

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23 KINGSTON W. PRUNTY, JR., Warden 

Sierra Conservation Center 

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Department of Corrections 18 

Background and Experience 18 

Questions by SENATOR AYALA re: 

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Security Classification of Institution 20 



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IV 



INDEX r Continued) 

Interference of Prioners ' Work with 

Private Sector 20 

Desire for Additional Work to be Performed 

by Inmates 21 

Most Pressing Problem Department Will 

Face in Coming Years 2 2 

Problems with Illicit Drugs and Alcohol 

within Institution 22 

Witnesses in Support; 

HECTOR LOZANO, Correctional Counselor II 

Chicano Correctional Workers Association 24 

CAROL PINKINS, Associate Warden 

Sierra Conservation Center 26 



12 Questions by SENATOR AYALA re: 

13 Sexual Harassment Grievances 27 

14 EDWARD DAVISON, Correctional Lieutenant 

California Department of Corrections 28 

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Questions by SENATOR PETRIS re: 
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Alternatives to Incarceration 29 

Educational /Literacy Programs 30 

Ongoing Measurement of Literacy 31 

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Effect on Recidivism Rate 31 

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Response from JAMES GOMEZ, Director 

21 Department of Corrections 32 

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22 Letter from LEON RALPH, Association of 

Black Correctional Workers, in Support 33 



Witness in Support: 



LARRY G. CARGILL, Correctional Lieutenant 
- Ij Sierra Conservation Center's Supervisor Coalition . . 34 



1 Questions by SENATOR PETRIS re: 

27 Alternatives to Incarceration 34 

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INDEX (Continued) 

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Parolees Returning Due to Technical 

Violations 35 

Programs at Sierra Conservation Center 37 

Qualifications for Inmates to be Assigned 

to a Conservation Camp 38 

Employability 38 

Program at Donovan Prison in San Diego 39 

Motion to Confirm 40 

Committee Action 40 

JOHN SEYMOUR, Executive Director 

iCalifornia Housing Finance Agency 40 

Plans and Objectives 41 

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Questions by SENATOR PETRIS re: 

Small Percentage of Loans Going to 

14 Lower Incomes 4 3 

15 Need for Agency to Remain Self-supporting ... 44 

16 Support for G.O. Bond Issue 45 

17 Aggressive Exploration of Revenue Sources ... 45 

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Difficulty of Single Mothers Getting 

into Program 46 

Geographic Problems with Former Director .... 46 



Statement in Support by SENATOR PETRIS 4 7 

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Questions by SENATOR AYALA re: 

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Position on Efforts to Provide Startup Fund 

23 for Infrastructure Bank from Statewide Bond . . 49 

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- 4 J Position on Majority Vote to Pass Bond 

j| Measures 49 

Motion to Confirm 50 

Committee Action 50 



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INDEX ( Continued ^ 

Compliments to Appointments Consultant 51 

Termination of Proceedings 51 

Certificate of Reporter 52 



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i P-R-O-C-E-E-D-I-N-G-S 

— 00O00 — 

3 SENATOR CRAVEN: Let's go next to Governor's 

appointees appearing today and begin with Richard P. Gannon, 
Member of the Workers' Compensation Appeals Board. 

6 If Mr. Gannon will come up, please. Have a seat up 

there. 

8 If you will, Mr. Gannon, tell us why you feel you are 

9 qualified for this job? 

10 MR. GANNON: Thank you, Senator. 

11 The Legislature, in accordance with the California 

12 Constitution, provided for the settlement of any dispute arising 

13 .under workers' compensation legislation to be handled by the 

14 Industrial Accident Commission, or now the Workers' Compensation 

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1:5 ii Appeals Board. 

For the past 22 years, a major part of my life has 



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17 been associated with the resolution of disputes. After being 



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discharged from the Marine Corps in 1967, I served an 
apprenticeship as a surveyor, and then worked as a crew chief on 
a survey party. I soon learned that on a construction site, the 
surveyor is the one everybody comes to to resolve disputes on 



;| how the job is to be done. This part of my job as a surveyor 

- 3 was one that I found that I really especially enjoyed. 

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This interest is what attracted me to becoming a 
union representative. As a business agent for the Operating 
Engineers Local 12, I became interested in alternative ways to 
resolve disputes between labor and management, other than 
strikes, lockouts, and other economic actions. I was fortunate 



to have my local union select me to attend Harvard University's 
Trade Union Program. The focus of this training at Harvard was 
to learn the other party's concerns in order to propose a 
i settlement or compromise that both parties could accept. The 
Trade Union students attended joint labor relations classes with 
i the Graduate School of Business students. We had to present the 
management arguments, and the M.B.A. students had to present the 



ij union positions 

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Having demonstrated the ability to understand both 

labor and management's concerns, I was selected by the Union and 

the owners of companies in the civil engineering and land 

surveying industry in Southern California to be the 

administrator of their Apprenticeship and Journeyman Training 

•Program. In this capacity, I was in charge of a three-quarter 
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of a million dollar a year operation, employing 12 full-time 

administrative staff and 30 part-time instructors. This 

experience gave me insights into the many problems faced by 

similarly sized small businesses, including problems with 

workers' compensation claims. 

My academic training in college was in the field of 

mathematics and logic. This background has helped me to be able 



,!to analyze the contentions and positions of parties in a dispute 

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and weigh the options available in proposing a resolution to the 



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problem that both sides could buy into. 

However, the real test of my ability to resolve 
disputes between parties who have extremely divergent views came 
when I became president of the local Little League where I live. 

[Laughter. ] 



1 I was the ultimate arbitrator between parents and 

2 coaches, coaches and umpires, and anybody else who wanted to get 

3 into an argument. 

4 SENATOR CRAVEN: That's really tough. 

MR. GANNON: I successfully survived for five years 
in that capacity. 

From there, in the community, I was elected to the 
local school board, and having served for the last three years, 
and one more year to go on that term, I have learned what it's 
like to be a governmental body and to deal with the fiscal 
problems that school boards are dealing with today. 

I believe that all of my experience, starting with 
the time in the service in the Marine Corps , going into the 
apprenticeship and work in the construction industry, as a union 
representative, being the administrator of a small business 
training program, has enabled me to have the judicial 
temperament and the ability that's required of a Workers' 
Compensation Appeal Board Commissioner by Section 112 of the 
Labor Code. 

SENATOR CRAVEN: Very good, thank you very much. 

Senator Petris . 

SENATOR PETRIS: Thank you, Mr. Chairman. 

We've been hearing a lot of talk about problems with 
workers ' comp over the last couple or three years . 

Do you believe that all our problems in California 
are caused by the workers ' comp situation? 

MR. GANNON: No, sir, I do not. 

SENATOR PETRIS: How much of it? 



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1 MR. GANNON: Workers' comp has become very visible. 

Working in the land development and construction industry, I 
would say one of the major problems that people had expressed to 

4 time prior to becoming this in this position were the permitting 
: issues, and the business 's ability to expand for development 

6 !i projects, to get started, and things like this, as a major 



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concern. 



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Workers' compensation is a frustration, I think. 
While I was the administrator, the 12 years I was administrator 
of the Apprenticeship Program, we had two workers' compensation 

11 claims filed. Both of them involved the stress components. 

lz It was frustrating to me to — as the person who, in 

13 I effect, they were filed against, being the manager of the 

14 '! company, was — or the training program, to understand that 

15 |j workers are frustrated by the pressures that anything puts them 

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I into, and they have this reaction. One of them, I felt, was 

|| justified. A person was going through a divorce, and certainly 



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18 :Jthe pressures of the work contributed to that. 



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The other one, I felt, it wasn't justified. There 
jwas an employee who really was not in a stressful situation. 



21 Yet, we as the people involved in the company or the business 



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enterprise did not have an opportunity to say what happened. 
The insurance company took off and ran with it, and we didn't 
really have any control to say: yes, no, settle it, don't 
settle it, or anything else. And the rates went up. 

And it's that lack of control, and lack of being able 
to do anything which, I think, is causing the frustration that 
people are experiencing. And if you'd permit me to suggest, 



1 maybe it needs to be addressed. 

SENATOR PETRIS: We're working hard to come up with 
I an agreement this year. One of the bills that passed one of the 
4 committees is one of them. There'll be several bills on the 
- s subject. 

I guess what you're saying, if we'd solved that 
workers' comp problem altogether and put it away, we still 
haven't solved the rest of our problems relating to business. 

MR. GANNON: No, I think it ' s a perception that 
people have, and perceptions become reality. But I think it's a 
perception that a lot of people have that it is a problem, but I 
don't think it's — you could have a perfectly operating 

13 Ijworkers ' compensation system, and we would still have an awful 

14 ijlot of the problems in California, I believe. 

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15 SENATOR PETRIS: That hasn't come through in the 
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16 ^current discussion of the problem. That's why I asked you. 

17 Have you had any chance to evaluate the impact of the 

18 ! Presley bill that we passed about three years ago making the 
commission of fraud anywhere in the system a felony, whether 
it's done by a worker, or a doctor, or a lawyer? Has there been 
any feedback at your level regarding the impact of that law on 
the problem, on the fraud part of the problem? 



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23 MR. GANNON: We see a number of cases being referred 



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jto the Fraud Unit for follow-up. 

If you're asking have we seen any deterrent effect, 
or any impact, it's hard to say in the review of the cases, in 
the scope of what we have. We have — usually at the 
administrative law judge level, the workman's compensation judge 



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1 level, if there's a hint that there's some fraud by any party, 
jit is referred to those local district attorneys and the Fraud 
/Investigation Units to follow up on it. 

The fines, the $1,000 fines, are — it's like 
anything else. It's so difficult to get to the point — I can't 
6 jsay honestly that I have seen any impact; although, I have seen 

that a number of cases are being referred that way, and I 

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8 jbelieve in the long run, the requirements to make people certify 
Ithat they understand under penalty of perjury, under penalty of 
fraud, and everything else, that everything they're claiming is 
accurate, all of the reports that the doctors do are required, 
and they actually did certain things, will have an impact. 

SENATOR PETRIS: Of course, I know you're one step 
removed at the appellate level from the actual hearing of the 
cases . 



16 I was also thinking beyond that, on the outside. The 



bill calls for criminal prosecution by the local D.A. Has any 
report filtered back to you regarding any degree of activity on 
that side of the solution? 

MR. GANNON: No, it really hasn't. 

The people — general conversation, people talk 
about getting injured. And I think some of the frustration is 

23 |;when they have no medical insurance where they work. They think 

24 about, if they get injured over the weekend, they would think 
about, "I hurt my back on Monday." 

I think that most people are basically honest, and 
given that additional knowledge and the billboards that you see 
along the highway, "Fraud Stops Here", and a picture of three 



1 people in a cell will have an impact. It's my gut feeling, but 

2 I really don't have any feeling other than that. 

3 SENATOR PETRIS: How old is the average case now when 

4 it reaches you for consideration? 
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5 MR. GANNON: When were the injuries, you mean? 

6 SENATOR PETRIS: Yes, or when was the claim filed? 
MR. GANNON: The claimed filed — by and large, the 

cases we're getting are now into the revised legislation, 
post-' 90 injuries. Occasionally there'll be one that's pre- '90 
and falls under the previous set of rules, but by and large, the 
cases we're getting now are injuries that occurred after January 
of 1990. 

SENATOR PETRIS: That's when we imposed the 60-day 



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MR. GANNON: Right, that's where a number of changes 
in the 1989 Reform Act were effective, and affected with 
injuries occurring January 1st and on, the agreed medical 
jlexaminer and the processes that they go through, which do seem 



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previous part — but they do seem to be working pretty well. 

SENATOR PETRIS: So, the improvements are taking 
22 hold, little by little? 

MR. GANNON: I believe so. 

SENATOR PETRIS: Thanks, Mr. Chairman. 

SENATOR CRAVEN: Senator Ayala. 

SENATOR AYALA: Mr. Gannon, you indicated that you're 
a former Marine, and that you served with the Little League 
people . 



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Are you sure you've got the right temperament for the 
job? 

[Laughter. ] 

SENATOR AYALA: I'm familiar with the workman's comp, 
because I sold it at one time, and it is no-fault insurance. If 
it's no-fault insurance, the employee gets compensated for an 



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1 I injury related to the workplace, and also compensated should he 



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lose a limb, or an eye, or something of that nature. There's 



limitations to that. 



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lu If it's no-fault, and all the law spells it out, why 

11 do we need attorneys involved in this thing? 

12 MR. GANNON: I think attorneys are necessary to a 
degree the same way I feel that working people occasionally need 
union representation on the job site, to give the worker a 
balance in a case against, in some cases, where the worker 
would perceive, or maybe actually there is, an unbalanced 
employer insurance company effort to — not to give him every 
right that he's entitled to. 

I think that the attorneys representing applicants do 



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a good job in making sure that people understand what their 
rights are, make sure that the pursue everything that they're 
entitled to. 

I personally don't see a lot of abuse to the system 
by the average applicant attorney. There are exceptions to 
that, of course, and they've been recently relatively well 



ij publicized. But by and large, they provide a pretty good 

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1 understand what his rights are, and what he can do, and the 

2 long-term consequences of a rather severe injury on the job 

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site. And I think just for the peace of mind, knowing that he 

Jjhas obtained everything he is entitled to, it works pretty well 

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SENATOR AYALA: Well, as you well know, workman's 
comp is in a mess in California. People can't afford it anymore 
because of the cost of medical bills, and attorney fees, and all 
these other things that go with it. 

It appears to me that if you knew that we you were 
covered, are you telling me that the average person wouldn't 
know what he was covered for; therefore, he needs an attorney to 
tell him what he has coming to him or her? 

It seems to me that in many cases, most cases that 
I'm aware of, the employee was pleased with the end result, but 
someone talked him into going to court to get more than what 



17 |i workman's comp called for. And that is, in many cases, the 



reason that the cost of workman's comp has gone up is the fact 



19 that courts are awarding higher awards, and costs of the 



! attorney fees are so great that even the employee gets very 

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little as a result of all this, but someone is paying for it, 



jand that's the employer. That's who paying for the whole thing, 



because there's no other contribution except the employer. 

Give me your thoughts on claims that are submitted 
for stress. 

MR. GANNON: We deal with stress components in some 
jof the cases. Some are strictly stress; some are stress as a 
result of the injuries. And it's the part of the law that has 



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1 been the hardest for me to understand in learning the law and 

- the cases that go along. 

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3 There's a separate -- separate schedule, I guess, for 

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4 permanent disability benefits based on psychological injury as 

5 'opposed to a physical injury. 

6 My feeling, and again, this is just a reaction from 
having studied some of the cases, and I well recognize the 
differentiation between an appeal body and a legislative body, 
but I think that the correlation between the acts — the injury 
and the long-term permanent impairment to somebody under 
psychological injuries and physical injuries could be looked at 
a little bit closer so that they come more into balance. 

Being psychologically, the schedule that's set up to 

14 || — f or the psychological injuries appears to be somewhat 

15 different than the same — and it's hard for me to relate to 

16 pthat. It's hard for me to understand exactly the impact of it. 

17 I've seen injured workers on construction sites 
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them, and what their limitations are, and their inability to 



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How psychological injuries were -- would impact a 
person, I haven't had much experience with that, and it's hard 
for me to visualize the limitations that person would have. And 
I think a lot of thought needs to — still more thought go into 
how that really plays out down the line. 

Not to minimize the fact that some people can get — 
get severe psychological problems and be prevented from 
competing in the open workplace, but I think it — and the 



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1 testing. If you lose a hand, you lose a hand and it's pretty 

2 visible. The testing that goes through to determine these 
^injuries is an inexact science, and I think that that's part of 

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4 the problem there. It's just — it's so different, it's hard to 

D bring them together, but I think it's going to be a challenge 
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6 for the state to come up with — without throwing it out and 

7 saying, "All psychological injuries are fraudulent or wrong," 

8 how do you separate the real ones from the unreal ones? 
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9 SENATOR AYALA: There's no doubt there are legitimate 

cases. I don't think that anyone will dispute that. 

But some of the claims I've seen are making a mockery 



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12 lout of the workman's comp system. They're really — it's a big 



joke, what some of the people put in for, and in many cases it's 

14 because they're in over their heads, you know, in what they're 

15 doing. 

16 But there's no doubt there's stress in law 

17 i enforcement and some of these things that take a lot of tension. 

18 But I mean, some of these cases that I have on record 

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19 |: from people who are complaining about not getting compensated 
for stress, they're really a big joke, in my opinion. And we 
should make that a fair deal . 

If they really have a legitimate case, they should be 
I compensated, but there's so many faulty claims that, you know. 
For instance, the law today says that all you have to prove is 
that 10 percent of the stress is job-related. 



26 MR. GANNON: Right. 



SENATOR AYALA: That's so much baloney, in my 
opinion. You get 10 percent stress at work, but 90 percent at 



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home, where who knows what's taking place at home? The kids are 

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addicted to drugs, and there's a problem at home; yet, the 

3 employer pays for that because all they have to prove is 10 

4 percent was workplace related. 

So, I have a lot of problems with that. When I sold 
a lot of workman's comp insurance, no such thing existed as 



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7 stress, you know. And now we've got stress, and I don't what 
Ijthey called it then, but there's stress in everything we do. 



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j Everyone who works for a living has some kind of a stress. I 
guess we all should put in for a workman's comp claim, you see, 
[because we've got stress. 

So, I am very concerned about that problem we're 
13 facing today with workman's compensation claims. And I'm really 



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hopeful that we can do something here to reform that, not to 
take away rights of people that have services and benefits 
coming, but to stop the abuses that are forthcoming strictly on 
the stress claims. 

You can't prove that someone doesn't have stress. 



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people take advantage of it. And the first thing they do when 
they get fired, or they lose their job, they put in a claim for 
stress, you know. 

I think we all could put in a claim for stress, 
especially in this building here. You know, it's stress 
everyday and everywhere we go. 

I just wondered how we're going to correct that, and 
what would you recommend as a fair percentage of job-related 
stress to be compensated? 



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MR. GANNON: That's an interesting question, and the 
percentage — 

SENATOR CRAVEN: I don't know that it was a question, 
but I think more an editorial comment . 

SENATOR AYALA: We're not going to hold you to that. 

MR. GANNON: No, I understand it's not going to — 
what I say today is not going to change the industry in that 
respect. 

As I said before, I think — I think the key to it is 
setting up ways of measuring how stress which is primarily 
caused by a job — and whether that "primarily" means 50 percent 
or more, I'm not sure — but primarily -- stress caused by the 
job precludes a person from competing in the workforce, and 
^therefore they have some level of permanent disability. 

Coming up with the magic formula, and so much of what 

16 workers' compensation does is on formulas. If you have a back 

17 injury and you're limited to no heavy lifting, that triggers a 

18 certain number and you get a percentage disability based on 

19 that. 

20 To come up with the right numbers in psychological 

21 | injuries that people feel are fair, and to identify and to 
almost scientifically be able to prove that this person really 
has had this -- the two examples I was talking about when I had 
employees working for me who filed stress claims, I felt one was 
fraudulent and I felt one was very — was very realistic. When 
you have somebody having outside stress such as divorce and 
things like this, and they're not — they're preoccupied with 
that and not with their work, then the employer's going to say, 



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1 "Listen, you're hired for a particular job. You have things to 
!do." They're introducing more stress on the individual, and in 
3 some cases that individual breaks down. 

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* l| That's what happened to the fellow that was working 

in our training program. He was broken down. He was — he flat 

6 [could not do anything. He was incapacitated. 

7 J 

' To separate those claims from the person who wants to 

8 take a vacation, wants to leave, and says "stress", and the 
insurance company settles with them for a token amount because 

10 jlof the — it's easier to do that than to prove it didn't happen, 

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11 land go through the legal challenges, and everything else, and 

i2 then back charges the company for the cost of that settlement, 
to separate those types of claims is going to be a challenge. 
It's going to take a lot of expert input from people who 
understand psychological injuries and people who understand the 
workplace and putting them together, I think. 

SENATOR AYALA: It's going to take a long time. Are 
we doing it now? Are we in the process of trying to come up 
with some kind of a solution? 

Given that scientifically and medically, we can't 
really tell what percentage is a good percentage, do you think 
10 percent is much, much too low? 

MR. GANNON: It's — it probably is. However, the 
workers ' compensation system is set up for a person who has what 
they call the egg shell, who is a fragile person, and they may 
have a propensity toward a back injury, or something like this. 
They're working fine, and then all of a sudden it is the job 
component that triggers the disability, and therefore the 



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15 

payment of medical, the payment of temporary time off, 
regardless of their propensity toward this, when it actually 
happens and it's determined that it happened because of this 
incident on a job, then it's compensable. 

Now, the permanent disability, the long-term 
disability that they're entitled to, is — is figured by a 
formula of how much did this tendency toward it, and would they 
have had a disability at a particular time in the absence of the 
jj industrial injury figures into the calculation of the permanent 
disability. 

Using that same formula, that needs to be looked at 
jby people familiar, again, with psychological injuries and say, 
iwell, if we're going to try and make it percentage-wise, what 
percentage-wise is it the same thing? If they — would they 



2 
3 
4 
5 
6 
7 
8 
9 
10 

II 

12 
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15 !!have had an injury absent — because of their outside stresses, 



would they have had some disability, and if so, it's 
nonindustrial. If it's strictly there's some disability 
strictly attributable to some particular problem at work, and 
things like that, this is — this is a way that it might be 
approached. 

The other thought I have is that I think one of the 
things that needs to be done is the awareness of people in the 
workplace and supervisors as to try to understand that some of 
the psychological stress is by people claiming continual 
beratement, and unfair pressures, and people give into that. I 
mean, there's too much pressure on the job, and finally they 
have some breakdown, or something that occurs that causes them a 
disability. 



9 
10 
11 



16 

1 Some of that can be prevented with education, and I 

know the insurance companies will go out and look at your 

3 workplace, and look at your hazards on the job and say you 

4 should correct these hazards. And your Senate Bill 30, I 

^ believe it was, that requires workplace safety inspections and 

ii 

6 things. 

_ 

' SENATOR AYALA: Yes, but the problem with some of 

i 

i those things is that if the employer, before he hires someone, 

knows that that individual is fragile, like you said a while 
ago, and subject to all these kind of claims, if he refuses to 
hire them because of that, that's discrimination. 

12 MR. GANNON: That's true. 

13 !| SENATOR AYALA: So the employer can't win or lose on 

14 ;; that for losing on that deal, and I don't understand that. 

15 But anyway, as you well know, that's one of the major 

16 problems facing us today. I sincerely hope that you'll be able 

17 to assist us in paving the way for some of the problems we're 

18 facing there. 
l| 

19 j MR. GANNON: I certainly would be interested in that. 

20 SENATOR CRAVEN: Senator Petris . 

SENATOR PETRIS: Well, maybe I can help. 
As a member of the Industrial Relations Committee, 

last year we passed a bill that required the worker to show that 
the predominant cause of stress was work-related as part of a 
package. Unfortunately, the Governor vetoed it. He felt the 
package didn't go far enough, and I think he got about 90 
percent. Instead of taking that and working on the next 10 
percent this year, he killed the whole thing. 



21 

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17 

1 So, I believe we're going to pass that bill again -- 

I don't mean just the committee. It went through both Houses -- 
and take care of that plus some of the other problems you 

4 mentioned. So, we might take care of it, so it'll make it 

? easier on the process, too. 

6 SENATOR CRAVEN: Thank you. 

7 Is there anyone here who wishes to speak on behalf of 

8 Mr. Gannon and his appointment? Anyone who stands in objection? 

9 There appears to be no one . 

10 SENATOR AYALA: I move the appointment of Mr. Gannon 

!j 

11 to the Workman's Compensation Appeals Board. 

12 SENATOR CRAVEN: Moved by Senator Ayala. 

13 ; Call the roll, please. 

14 SECRETARY WEBB: Senator Ayala. 

15 SENATOR AYALA: Aye. 
i 

16 || SECRETARY WEBB: Ayala Aye. Senator Beverly. 

17 Senator Petris . 

18 SENATOR PETRIS: Aye. 
SECRETARY WEBB: Petris Aye. Senator Craven. 
SENATOR CRAVEN: Aye. 

Zl SECRETARY WEBB: Craven Aye. Senator Robert i. 

The vote is three to zero. 

SENATOR CRAVEN: The vote is three to zero; the 
measure's out to the Floor. 

Congratulations . 

MR. GANNON: Thank you. I appreciate it. 

SENATOR CRAVEN: Next we have Kingston W. Prunty, 
Jr., Warden, Sierra Conservation Center, Department of 



19 

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18 

Corrections . 

MR. PRUNTY: Mr. Chairman. 

SENATOR CRAVEN: How are you, sir. 

MR. PRUNTY: I'm fine. 

SENATOR CRAVEN: Could you tell us, please, why you 
feel qualified for this position? 

MR. PRUNTY: I've been an employee of the California 
Department of Corrections for the last 22 years. During that 



12 

13 

14 



time, I've had the opportunity to work in a progression of 

10 assignments that have prepared me and developed my 

11 qualifications for this position. 
I began with the Department of Corrections in 1971 as 

a correctional officer at Folsom Prison. While I was there, I 
received a Bachelor's Degree in Criminal Justice from the 

15 California State University, Sacramento. Subsequently, I worked 

16 at the California Men's Colony as a correctional program 

17 supervisor, and for the succeeding 10 years, while assigned to 

18 Dueul Vocational Institution, I served in the capacity of 
iq correctional sergeant and lieutenant. I also had the 

20 opportunity to function as the institution's public information 

21 officer, the administrative assistant to the warden, in-service 
training manager, and commander of the institution's special 

-^ , emergency response team. 

24 I also instructed courses at a — at Corrections at 

1 

25 the community college level. 

i 

26 | In 1985, I had the opportunity to serve as a 

correctional captain at Sierra Conservation Center, and the 
following year took a lateral transfer to the newly opened 



19 

I 

1 maximum security complex at Tehachapi where, as a program 

2 administrator, I had the opportunity to convert parts of that 

3 facility from Level IV general population housing to security 

4 housing units. 

5 In 1987, I was appointed as the Chief of the Training 

6 Services branch of the Department, where I was responsible for 

7 statewide oversight of the Department's training programs, 

8 iincluding the basic Correctional Officers Academy, the local 
[in-service Training Programs, and the Department's Management 

10 Training Program. 

i! 
II I 

11 J! In 1989, I was appointed as the Chief Deputy Warden 

12 !at the Richard J. Donovan Correctional Facility, San Diego, and 

13 served there for three years until April, 1992, when I was 

14 appointed as Warden at Sierra Conservation Center. 

15 The Department has provided me with a broad base of 

16 experience in both line and staff positions, in supervision and 

17 management. I've served at six different correctional 

18 facilities, from minimum security to maximum security, including 

19 security housing units. 

20 My experience includes: security and custody, 

21 classification, training, emergency operations, personnel 

22 management and fiscal management. 

23 My commitment is to public service and public safety, 

- 4 to providing a safe working environment for the personnel, a 

j 

- D humane and safe living environment for the inmates, an 
!l 

26 ! environment where behavioral change can occur. 

| 

27 I think because of the breadth of my experience and 

my commitment, that I can provide the leadership that is 



20 

1 essential in the safe and efficient management of a correctional 

2 facility. 

3 SENATOR CRAVEN: Very good. 

4 When you mentioned San Diego, are you referring to 

5 ; Donovan? 

6 : MR. PRUNTY: Yes, sir, I am. 

7 SENATOR CRAVEN: Do we have any questions at this 

8 itime. Senator Ayala. 



9 SENATOR AYALA: Mr. Chairman, I'd like to ask the 



10 



18 
19 



23 
24 



gentleman, this is a Class I institution; is that right? 



11 Inmates are Class I? 



l * MR. PRUNTY: Actually it's a multi-facility, has 

•3 iLevel I, II, and III. 

14 SENATOR AYALA: Minimum security. 

15 MR. PRUNTY: Parts of it are minimum security; parts 

16 of it are medium. 

SENATOR AYALA: And a lot of work is done within the 
prison grounds. How much of it is done that would have a 
tendency to interfere with the private sector? 

20 MR. PRUNTY: I don't believe we interfere at all with 

21 the private sector. 

We have community service crews that provide services 
to only tax-supported public agencies, a variety of services 
that we do provide . 



ii 



i' 



25 The inmates in the institution that are not allowed 

i 

26 

27 



"outside the perimeter also provide services for those same 
? entities. The inmates that are assigned to the conservation 



camps do public service: fight fires and floods. 



21 

We are pursuing joint venture programs where we can 
work in a cooperative manner with a private vendor, but to date 
we have not been successful. 

But we have no programs inside that really compete 
with private industry. 
6 SENATOR AYALA: Is this program, Mr. Gomez, similar 

to the one you have next to CIM? The forestry fighting unit 

8 there? 

9 MR. GOMEZ [FROM THE AUDIENCE]: He's responsible for 

i| 

10 about 25 of 40 camps; that's one of those. 

11 SENATOR AYALA: But it's similar to that. 

12 MR. GOMEZ [FROM THE AUDIENCE]: It's similar. That's 

13 one of those camps. 

14 SENATOR AYALA: What additional work would you like 

15 to have inmates perform within the institution that you don't 

16 have now? Anything that you feel would be beneficial to all 

17 concerned? 

1X MR. PRUNTY: Well, I can tell you that Sierra 

19 Conservation Center probably is -- has the best mission this 

■I 

20 Department has, and that — and the inmates at that facility 

21 provide a higher level of public service than other institutions 

22 are able to provide because of our mission to train inmates for 

i 
|] 

23 service in the conservation camps . 

24 |j We do have a fair amount of inmates that we do not 

1 

have meaningful employment for. I would like to pursue a joint 

ij 

! venture because I think that is a program that can provide real 
life work experiences for the inmates and have a lot of positive 

TO 

impact, both on the self-esteem of the inmate, and require them 



22 

1 to pay some of their own costs of incarceration. 

2 j SENATOR AYALA: Aside from the overcrowding that 

we're experiencing today in our prison system, in the next five 
years, outside of the crowded conditions, what do you feel is 



the most pressing problem the system will be facing? 

MR. PRUNTY: Overcrowding has been with us forever. 

SENATOR AYALA: Mr. Gomez says that, too. 

MR. PRUNTY: He may have more insight in that than I. 



But I see more of the same. We have been involved in 

10 'the most aggressive prison construction program in any state in 

■ i ! 

11 !|the United States. We've found that the faster we build them, 

12 the behinder we get. We can't build our way out of this, even 

i 

13 though we have done a fair amount of attempting to, to keep up 

14 [with it. 

I think we need to take a look at how we do business. 
i 

;The methods of incarceration, maybe alternative forms of 
| 
incarceration, and some innovative forms, maybe like the boot 

camp program that was recently activated at San Quentin. 

SENATOR AYALA: Do you have any problems at your 

institution with illegal use of drugs and alcohol within the 

premises by inmates? 



16 

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18 
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21 






22 || MR. PRUNTY: Yes, sir, we do. 

23 SENATOR AYALA: I really can't understand that, 

I! 

jbecause I don't know how — well, they sneak it in some way, but 

jwhat can we do to eliminate that sort of thing? Do you have any 
26 



27 
28 



ideas 

MR. PRUNTY: My opinion — 

SENATOR AYALA: How many people are at your 



23 

1 institution? 

2 MR. PRUNTY: There are 4,000 inmates at the facility, 

3 and 2200 in the camps. 



4 



SENATOR AYALA: And you have illegal drugs and 



D [alcohol within the premises? 

6 MR. PRUNTY: Yes, sir, we do. 

7 SENATOR AYALA: Do families bring it in, or how do 

8 ithey get that? 

v MR. PRUNTY: The overwhelming majority of illegal 

I 

10 drugs and other contraband that is introduced within the 

,i 

11 institution comes through the visitors and families, either 

il 

lz through contact visiting, family visiting, or in packages 
i 

13 Ireceived for the inmates. 

! 

14 There are occasions when we have an employee who 

15 ;falls from grace and brings some illegal contraband in, but 

i! 

16 those are rare exceptions rather than the rule. 



17 
18 



As long as we allow the contact visiting and do not 
do any intrusive searching of the visitors, we can expect that 
19 there will still be trafficking of contraband inside the 

- u ^institution. 

i 

21 SENATOR AYALA: We may not be able to eradicate the 

uproblem altogether, but any recommendation you have to minimize 

it? 

MR. PRUNTY: The only recommendation I could have, 

Senator, is if we are going to pursue that, then we need to take 

a look at the contact visiting we do allow, or either provide 
I 
fjmore emphasis on the searching of the visitors as they come in 

il 
now . 



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1 As it occurs now, the metal detection screening is 

- the basic screening we do for the visitors, unless we have some 

i 

reason to believe they are in fact bringing in contraband, and 
4 then we can subject them to unclothed body searches and other 
means . 



5 



6 SENATOR AYALA: I have no other questions, Mr. 

7 Chairman. 

8 SENATOR CRAVEN: Very well. 

9 Is there anyone in the audience who wishes to speak 
lin favor of the nominee? Yes, would you come forward, please, 
|!and state your name. 

i 

MR. LOZANO: Yes, my name is Hector Lozano. 

I 

Mr. Chairman, Members of the Committee, thank you for 
llgiving me the opportunity to speak today. My name is Hector 
15 ILozano, and I'm a Correctional Counselor II at the Sierra 



10 

n 

12 
13 
14 



16 Conservation Center. 

\ 

17 Today, however, I'm representing the Chicano 



18 
19 

20 
21 
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Correctional Workers Association, which is a nonprofit 
association. It consists of approximately 2,000 members 
throughout the State of California at various prisons and parole 
officers . 

I'm here today to express my strong support for Mr. 
15 Prunty's confirmation. Briefly, I'd like to say that some of 
the reasons for it are that hiring of qualified minorities and 



25 
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women continues very well at SCC. I could have probably come to 
you today with some graphs, statistics, and so forth, but I 



27 'think what I wanted to touch on was the qualitative aspects of 



28 



Mr. Prunty as a Warden. 



25 

1 When Mr. Prunty worked at DVI in Tracy as a 

correctional lieutenant, I was an officer and he happened to be 

3 my lieutenant. At that point, I realized that he had a great 

4 sense of fairness about him. And I think that everyone that 
s worked for him also recognized that fairness. 

6 When he came to Sierra Conservation Center as a 

correctional captain, that sense of fairness continued, and 
8 certainly now as the Warden it continues. 

He constantly promotes good staff morale, and he does 

10 ijthis, for example, by means of maintaining an open door policy. 

| 

11 And I don't want to just say open door policy as people say it. 
I 1 

12 iMany people don't have their doors open long enough to have an 
i' 

13 open door policy. Mr. Prunty does. 

14 On a continuing basis, he meets with various groups, 

15 bargaining units, and individual staff persons, and is always 

16 willing to address any issues that they may raise. 

u Perhaps the clincher behind all this, though, is that 

18 Mr. Prunty demonstrates a genuine interest, a genuine commitment 

19 toward his staff and institution that he manages. It is not 

20 often that you see that type of a commitment by administrators 
-' and the management style is an excellent one. 

22 In conclusion, I'd just like to say that he is indeed 

an excellent nominee for the position of Warden. I don't 
24 believe that the Director or the Governor, or perhaps even this 

ii Committee, is going to find a better candidate to be Warden at 

ji 

26 iour facility. And I would just so ask that this Committee 

ii 
->7 I! 

J recommend to the full Senate confirmation of Mr. Prunty as 

?8 ! 

Warden at the Sierra Conservation Center. 



26 

SENATOR CRAVEN: Thank you very much, sir. 

Do you have the spelling of Mr. Lozano's name? 
i MR. LOZANO: It's L-o-z-a-n-o, for the record. 

SENATOR CRAVEN: I had somebody teach me Spanish by 
that name, and he spoke nothing but Spanish in class. 



6 I MR. LOZANO: I could speak Spanish, if you'd like. 



7 
8 
9 
10 
II 
12 
13 
14 



SENATOR CRAVEN: The first day he came into class, he 
said something in Spanish to all of us, and everybody looked at 
the other one and said, "What did he say?" Some guy said, "He 
said, 'Class dismissed,'" and everybody got up and walked out. 
A great way to start a study of the Spanish language. 

It's nice to have you with us. I might add, he 
called himself "Lothano", because he was a Castillan, I guess. 

MR. LOZANO: He mispronounced it. 

I! 

15 [Laughter.] 

i 

SENATOR CRAVEN: All right. 

Anyone else who wishes speak in favor of the nominee? 
Yes, please come forward, if you would. 

MS. PINKINS: My name is Carol Pinkins . I'm an 
Associate Warden at Sierra Conservation Center. 

SENATOR CRAVEN: Very good, nice to have you. 

MS. PINKINS: I have worked with Bud Prunty for 
-^ approximately one year, and prior to that I worked with him as a 
peer 

One of the things I'd like to say on behalf of Mr. 
Prunty is that he is a very ethical and special person to Sierra 
Conservation Center mainly because he is one of the few people 
that I have ever worked for who actually wants to do the right 



16 
17 
IX 



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20 

21 

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27 



1 thing. And I think that's important in this line of business. 
When Bud initially came to Sierra, I kind of felt 

3 Sierra was cruising along and once he got there, we'd shift 

r 

4 gears. And now he holds us accountable for who we are, which 

<- i 

3 are state workers, and he asks questions. And with the budget 



6 



crisis as it is today, he wants us to be good state workers, and 



u 



he's holding us accountable, and I think that's important today. 

8 But basically, wants us to be good employees, and he tells us 

ii 

9 that he cares about us, and that's beginning to filter down to 
10 |ithe employees in the institution. 

And he ' s concerned about how we treat inmates , how we 

12 iitreat each other. And I think today, that's very important. 

13 We talked about the stress issue earlier, and I think 

|l 

14 ^that's part of it, how we treat people; how we deal with 

15 ^employees; whether it's adverse action, whether it's correcting 

. , ,i 

1(5 employees, it's very important. And I think that that is a way 

17 ithat we will, in the Department of Corrections, probably prevent 

18 lisome of the stress that we're seeing today as state workers. 
I 

19 And I feel that if Bud is not confirmed as the Warden 

20 ijat Sierra Conservation Center, it's going to be a great loss for 

21 (the staff as well as the inmates at Sierra Conservation Center. 

I 

SENATOR CRAVEN: Thank you very much. 

SENATOR AYALA: Can I ask the lady a question? 



23 



24 SENATOR CRAVEN: Senator Ayala. 



25 
26 



SENATOR AYALA: Have there been any sexual 
harassment grievances surface at your institution? 



27 j MS. PINKINS: Yes, there has. 



28 



SENATOR AYALA: How have they been handled? 



28 

1 MS. PINKINS: I am the EEO Affirmative Action 

Coordinator at Sierra Conservation Center, and I've been in that 
- 1 position for one year. 

4 What we try to do is handle that informally, and we 

I 

5 >do that by getting the two parties together, talking about it. 

■i 

6 And there has been adverse action taken against staff who have 

7 participated in sexual harassment. 

ii 

8 II SENATOR AYALA: Thank you. 
I 

9 SENATOR CRAVEN: Thank you very much. 

MS. PINKINS: Thank you. 

SENATOR CRAVEN: Is there anyone else who wishes to 
speak in support? 

MR. DAVISON: My name is Edward Davison. I'm a 

14 correctional lieutenant, and I've known Bud Prunty for 13 years. 

15 I'd like to thank Lozano for such a great speech. He 

16 ;Stole mine. 
! 

17 [Laughter. ] 

MR. DAVISON: But two things that I really think 
about Bud is, he's sensitive and he's compassionate. And with 
the type of workforce that we have, those two elements are very, 
very important . 

That's the gist of my speech, and I recommend 

23 ^confirmation of Mr. Prunty, of course. 

24 SENATOR CRAVEN: Thank you very much, sir. 

ji 

I think he may be both sensitive and compassionate, 
Ibut I think he also has some very, very fine friends who have 

been very articulate and certainly very, very sincere in what 

ij 

they've said. 



18 
19 
20 
21 



26 

27 
28 



29 

1 Anything further? Anyone in objection? There 

appears none. 

3 SENATOR PETRIS: May I ask a question? 

4 SENATOR CRAVEN: Sure, certainly, Senator Petris . 
3 SENATOR PETRIS: I wanted to go into a couple of 
6 policy problems. 

' You said in answer to Senator Ayala's question, the 

! 

s ijworst problem is overcrowding. And you also mentioned something 

v about alternative options other than incarceration. 
I 

10 Can you expand on that? Do you have some 

11 ;; recommendations that we might consider? 

12 MR. PRUNTY: Well, I think yes, I do. 

13 There is an alternate sentencing program currently in 

i! 

14 liplace at San Quentin. It's a pilot project. That may or may 
ii 

15 !;not have any impact on it. 

16 ]| The Department has been pursuing for some time a 



17 



program called the Structured Prison Environment. It's — even 



18 though we currently base the incarceration and the privileges on 

19 demonstrated work ethic and effort, we have a ways to go in 

20 llorder to actually approximate the earning of privileges in its 

21 entirety. 

The Structured Prison Environment makes the inmates 
responsible for everything that they earn, and certainly they 
are subject to losing those privileges if they — if they 

misbehave or they do not perform their work assignments 

|i 

i! acceptably . 

Those are things, I think, that the Department needs 

i to move forward on, and I know that they are. 



23 

24 
25 
26 
27 
28 



30 



The other thing is that the educational programs 
provided in the Department are probably the — the premier, I 
think, method in which we can ensure that they — we do 

something positive with them while they're there, rather than 

i 

'have the population continue to increase with the — with the 
iparole failures. People need the skills to survive outside. 



The education system, I think, provides them with that. 

8 |l SENATOR PETRIS: What can you do? You've got 65 

jj 
percent that are illiterate, or below fifth grade level. 

MR. PRUNTY: Yes, sir, we do. 

SENATOR PETRIS: What do you do about that? 



10 



12 



|| 

MR. PRUNTY: Well, we're complying with the Stirling 
13 



15 



17 
18 



bill. We require that inmates be involved with the literacy 
'programs. Our intention, of course, is to raise their literacy 
level to at least the ninth grade and provide a progressively 
16 large number of inmates with those expectations. Certainly 
that's a step in the right direction. 

SENATOR PETRIS: Is that part of the consideration 

19 when somebody's recommended for parole? 

20 j MR. PRUNTY: No, sir, it is not. 
I 

21 We provide a variety of rehabilitative programs, but 

22 'based upon the sentencing structure of the Department, inmates 
'that are involved in work assignments and/or education 

I assignments can work — receive a day off their sentence for 

j 1 every day that they work. We do — it does encourage inmates to 

| become involved in the education system, and certainly we keep 

!the vocational and academic assignments at the institution as 

i, 

filled to capacity as we can. 



3 



31 

So, we do try to set the expectation that it will be 
— that it's important for them to get those skills, but it's 
not specifically tied to early release, other than by 

4 participation in it. 

ii 
i, 

5 SENATOR PETRIS: You get some kind of credit, I 

6 suppose? 

j 

7 MR. PRUNTY: Yes, they do. 

8 SENATOR PETRIS: Now, is there a degree of 
improvement measured somewhere along the line within a certain 
time before the release? 

MR. PRUNTY: In terms of their — 
SENATOR PETRIS: Literacy. 

MR. PRUNTY: Oh, yes. It's measured on an ongoing 
basis . 

The education system routinely measures their 

ji 

16 'progress into achieving that level of literacy that's required 

17 by the — the legislation. 

18 SENATOR PETRIS: Has that affected their recidivism 

19 rate at all? 
MR. PRUNTY: If I told you I knew that, I ' d be 

premature. I do not know. 

SENATOR PETRIS: Maybe nobody knows yet. 

MR. PRUNTY: I don't think anybody knows yet. 



10 

ii 

12 
13 
14 
15 



20 

21 
22 



24 



i I certainly have a believe that in order to be 



effective out there, that — and be successful on parole, that 
26 iyou need to be able to read, and write, and perform those basic 
survival skills that education provides you with. 

SENATOR PETRIS: I guess we don't have any measure of 



32 



that. There have been a lot of studies on recidivism, but I 
- don't know if any of them — maybe Mr. Gomez can tell us. 
3 MR. GOMEZ [FROM THE AUDIENCE]: There' ve been a 



tremendous number of studies on recidivism, but I think the best 
you can get out of the evaluations that have been done has been 
that if you get involved, or individually motivated, whether 
it's a drug treatment program, whether it's in education, 
Jwhether it's in prison industries, your recidivism rate will go 



idown. 



10 

ii 

12 



To the extent that people are not involved, and most 
of them do not care to be involved, the propensity is to come 

back; it goes up. 

|| 

13 I think the Federal Bureau has done a recidivism 

ij 

14 i study on prison industries which shows the more you're involved 

ii 

15 in prison industries, the recidivism rate is reduced by about 5 

j 

16 percent. I think in Florida they've done some evaluation on 

17 education. 

18 But I think the intuitiveness in all of us is that if 



19 



;you have a basic education, you have a better chance. Your 



20 {survival skill is clearly there. 



21 



We don't have good, longitudinal studies anywhere in 



the nation that says education can guarantee a reduction in 

i! 

{recidivism, but everybody in their guts knows that if you can go 
ji 
24 {from a second grade education coming in to a tenth grade 

;| education going out, you've got a lot better chance for 

survival . 

27 SENATOR PETRIS: It seems to me if we measured it 

28 lj 

3 right at the end, and then keep track of them, or at least pick 



26 



33 

1 them up when they come back -- I think if I were teaching the 
course and trying to get their literacy up, I'd have them read 

3 the Penal Code before they left. It should be a requirement. 

4 MR. GOMEZ [FROM THE AUDIENCE]: Some of them know the 
- s Penal Code better than we do . 

6 SENATOR PETRIS: They know it by heart? 

7 Thank you. 

8 jj SENATOR CRAVEN: Thank you. 
No one else wishes to testify? All right, fine. 
While you're coming up, let me read a letter. This 

is from Leon Ralph and Associates, who has the membership of the 

12 Association of Black Correctional Workers, and they have been 

II 

13 advised of the meeting today. They send this message: 

14 "Some of our members work with Mr. 

15 Prunty as employees of the Department of 

16 Corrections. He has demonstrated good 

17 leadership and helped to develop an 

18 environment of equity for both employees 



9 
10 
II 



• 



19 
20 

21 



and inmates. Therefore, we respectfully 

request that you and the Members of the 

Senate Rules Committee recommend approval 
« 

22 of his confirmation." 

23 'Signed, 

24 "Sincerely, Leon D. Ralph." 

ii 

I] 

25 So, that is another organization that is in support. Mr. Ralph 

™ I 

Zb lis a gentleman that both Senator Petris and I — I don't think 

27 [Senator Ayala — served with years ago. 

28 Yes, sir, state your name, please. 



34 

1 MR. CARGILL: Yes, sir. 

My name is Larry G. Cargill. I'm a correctional 

3 lieutenant at Sierra Conservation Center. 

4 I am here as an officer of our institution's Sierra 
Conservation Center's Supervisor Coalition. The coalition was 

6 formed about January of 1992 to to upgrade the working 

i| 

7 conditions of the sergeant and lieutenant at Sierra Conservation 
!i 

8 j Center, since this was prior to Mr. Prunty's arrival. 

9 Subsequent to that, we have had an opportunity to 

j 

10 jihave many, many dealing with Warden Prunty, of which it has 

" I inspired a lot of confidence and shown us that he has the 

12 lability to deal with our problems and concerns. 
u And our organization represents approximately 7 

14 percent of the sergeants and lieutenants at Sierra Conservation 

15 (Center. I am here to say that our organization would highly 
ii 

16 j recommend Mr. Prunty as a Warden. He has been a fine Warden up 
i ! 

17 jto this time, and I'm sure if he's confirmed, he will continue 

18 j that. 

19 SENATOR CRAVEN: Thank you, Lieutenant. We 

20 appreciate it. 

21 Anyone else? There appears to be none. 

SENATOR PETRIS: I asked you about incarceration, and 

you talked about education and training. 

But I was looking for alternatives that you might 
have in mind, other than incarceration, that we might adopt. 

You know, we have new prisons that we can't even use 
i because we don't have the money to staff them. We're up against 
a big crunch, and if we could reduce the prison population in 



22 
23 
24 
25 
26 
27 
28 



35 

1 some other satisfactory method, it might help us in several 
~ different ways. 

3 Is there anything you had in mind when you talked 

4 about incarceration alternatives? 

5 MR. PRUNTY: No, other than the fact that, as Mr. 

6 Gomez mentioned, they need to be involved in programs and 

getting their commitment to be involved in those programs, other 
! i 
| than just to go through the motions, is really the challenge 

ii 
9 that is to the correctional employees. 

All the rehabilitative programs we provide, unless we 

find that mechanism that — 



11 



12 



13 
14 



SENATOR PETRIS: What about not being in prison at 



all, being somewhere else, in some other kind of monitored or 
controlled setting? 

15 MR. PRUNTY: Well, when you think about 50 percent of 

., i 

1(5 i the inmate population is in for violent offenses, I'm not sure 

II 

17 jjthat I would recommend that as being a viable alternative. 

18 I think maybe — 
SENATOR PETRIS: Well, that still leaves 50 percent. 

There's an awful lot of nonviolent folks in prison, and a lot of 

i : 

-' them get sent back on technical violations. We have a very high 

jl 
-- percentage of people who have returned on, you know, technical 

23 violations of the parole. 

- 4 So, I grant you, we've got the violent ones. What 

about the nonviolent ones? 

MR. PRUNTY: Let me speak to the issue of the 



19 ! 



20 



26 



"' ; technical violations. 

I] 
28 ! i 



I think at one time we had a higher, a much higher, 



36 

1 rate of technical violations than we currently do, and that's 

2 the result of Mr. Gomez's policies, I think, to really take a 

3 look at why we're bringing inmates back to prison, and see if we 

4 can't maintain them out on parole and make them more successful. 

5 SENATOR PETRIS: Of course, your shop doesn't bring 

6 them back. Somebody else brings them back, so he's stuck with 

7 i them . 

B But he's saying, the decision to bring them back is 

9 not made by the Department of Corrections. 

10 MR. PRUNTY: Not entirely true. A technical 

11 violation is a violation of conditions of parole. It doesn't 

12 necessarily mean they have a new criminal offense. Our own 



13 parole — 

14 i! SENATOR PETRIS: But you've got a parole officer who 

i| 

15 ; doesn't work in the prison. He's outside somewhere; isn't he? 
MR. PRUNTY: True, but he's still part of the 

Department of Corrections . 



16 

17 

18 SENATOR PETRIS: Well, yes, all right. I meant, he's 

19 not part of inside the walls. I know they work for Mr. Gomez. 
MR. PRUNTY: I think we're all working in the same 



20 



'I 
i 

21 'direction with that. 



22 



I can say this, that I think that there is some real 



23 II value in meaningful hard work. I think that challenging inmates 



24 



and expecting that would work very hard inside the prison, in a 



25 ! humane manner, make them produce something valuable, they 



26 

27 
28 



i 



j develop self-esteem. I think we could probably keep them in 
prison a shorter period of time and have a higher degree of 
success on parole. 



37 

1 SENATOR PETRIS: Keeping them less time within and 

- more time outside. 

3 MR. PRUNTY: Yes, but with a higher expectation for 

4 good hard work inside. 

5 SENATOR PETRIS: Can you describe some of those 

6 programs that are in operation now? 

7 MR. PRUNTY: Yes, in my institution? 

8 SENATOR PETRIS: Yes. 

9 MR. PRUNTY: Certainly. Give me the opportunity to 

10 talk to you about the conservation camps. That is probably the 

11 best thing this Department does. 

12 We — the — 

!| 

13 SENATOR PETRIS: That's been my impression for a long 

14 time. 

15 MR. PRUNTY: It is; it is. 

16 We have approximately 2200 inmates just in the 20 

17 camps that Sierra Conservation Center administers. And of 

18 course, Susanville has another facility similar to mine that 
operates another 18 camps. 

That program is jointly operated by the Department of 
Corrections and the Department of Forestry. Nowhere in any 
other program that I have had the opportunity to observe — and 

I've seen many in this Department — do you see the level of 

i 
l 

24 J: self-esteem and discipline that is developed in the inmate 

workers that are going through the camp training program. They 
see some real value in what they do. Their self-esteem 



19 
20 
21 

22 



I; 

26 



ll improves . We have relatively few problems in the conservation 
"° camps because of it. 



38 

1 SENATOR PETRIS: What does the inmate have to do to 

- j : qualify to go into the camp? Does he have to make points in his 

3 conduct somewhere along the line? 

4 MR. PRUNTY: Somewhere along the line, because he has 
to be eligible for minimum security, and that has something to 

do with his classification score. Basically nonviolent in 

'i 

7 nature; although we screen every case very closely. 



8 



They to be on good behavior inmates . They have to 



earn their way into the Forestry training program and have to 

:! 

10 participate in a physical training program before being cleared 

11 to go outside the fence and work to learn the forestry and 

i 

12 f iref ighting skills preliminarily to being assigned to a 

13 conservation camp. 

14 SENATOR PETRIS: Do any of them get employed in those 
j 

15 'departments afterward, or in those functions as f iref ighting? 
'i 

16 MR. PRUNTY: I don't have good figures for you; I do 
1 1 

17 not. 

18 Let me mention another one, however. There are some 

!! 

19 programs that I became familiar with at Donovan Correctional 
facility, and that is through the inmate community service 



21 



crews. Specifically, they had an arrangement, a contract, with 



- 2 '; the San Diego Trolley to employ inmates, inmate workers, to 
23 l! maintain the trolley system. And there was a concerted effort 
by the employer and the institution to place inmates . As they 

">S ii 

learned the skills and developed a work ethic, they actually 

l| 

jj hired them as employees of the San Diego Trolley system in fair 

27 I' 

numbers . 

SENATOR PETRIS: It seems to me at one time there was 



39 

1 a prohibition on any municipality hiring felons or ex-felons. I 
know it ' s true in law enforcement . 

3 MR. PRUNTY: That is true. 

4 SENATOR PETRIS: I thought it extended to any 

5 municipal job. 

6 You apparently got that waived or suspended or — 



7 



li 






MR. PRUNTY: Well, the arrangement is that they are 



° able to do that, yes, sir. And the Department has had some 

i! 



9 examples where we have hired some ex-felons. 

I! 

SENATOR PETRIS: How many are involved in the San 



10 

ll 



Diego situation that are working? 

MR. PRUNTY: Inmate workers? 

SENATOR PETRIS: Yes. 

MR. PRUNTY: Oh, I would think now they have about 



14 
15 

16 

17 



isix community service crews, eight to ten inmates apiece. 

ii 

I 

;;Upwards of sixty. 



SENATOR PETRIS: How long has that been going on? 

18 MR. PRUNTY: Oh, from the time I got there, I'd say 

19 four or five years. 

;| 

20 SENATOR PETRIS: And was that expanded from a smaller 

r 

21 | number? 

22 MR. PRUNTY: Yes. 

23 j SENATOR PETRIS: Is it growing? 
MR. PRUNTY: It began with one crew. As the 

relationship developed, and the value of that cooperative 
arrangement became apparent, yes, it did expand. 

SENATOR PETRIS: Do you anticipate further expansion? 

MR. PRUNTY: To the degree they can, yes. We are 



24 
25 
26 

27 
28 



ii 



3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

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40 

providing — they're providing a high level of inmate job 
assignments now. We do maintain the buses, the trolley stations 
themselves. I think pretty much right now, that is fairly 
staffed to the degree that they can. 

SENATOR PETRIS: Thank you. 

SENATOR CRAVEN: Very good. 

Did you have something? 

SENATOR AYALA: I'd like to move the confirmation of 
Mr. Kingston W. Prunty, Jr., Warden of the Sierra Conservation 
Center. 

SENATOR CRAVEN: Very well, call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 
Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

The vote is three to zero. 

SENATOR CRAVEN: Very good. Thank you very much, 
sir. 

Next we have John Seymour, Executive Director, 
California Housing Finance Agency. 

I don ' t think that this gentleman needs too much 
introduction or to tell us who he is or what he can do, but if 
you have some remarks, Senator Seymour, please go ahead. 

SENATOR SEYMOUR: Thank you, Mr. Chairman, Members of 



41 

the Committee. It's good to be back in this room. 

I had suggested to one of the sergeants when I came 
in, little did I know some day I ' d be back here in this capacity 
in this room. 

I'd really like to suggest, in listening to the 
nominees that preceded me, at least one nominee made reference 
to his service in the Marine Corps as well as Little League, as 
I recall. And I'm mindful, Mr. Chairman, of your accurate 
portrayal of the former Marines now serving on this Committee. 

I wanted you to know that I ' m a former Marine . 

[Laughter. ] 

SENATOR SEYMOUR: On the other hand, having to do 
with housing, I'd have to admit, Mr. Chairman, that the housing 
I experienced in the Marine Corps was far less than adequate, 
and I would hope to, as the Director of CHFA, to improve upon 
that. 

In a serious vein, Mr. Chairman, I'd be happy to 
answer any questions of the Committee, of course, but in a 
serious vein, it had been my observation that CHFA as an agency, 
the California Housing Finance Agency, as I viewed it the eight 
years that I served in this august body, they did a good job. 
They were well managed. But for my part, I wasn't, as a State 
Senator, anyhow, a Member of this body, I was not satisfied with 
the volume of business that they did; with what appeared to me 
to be a less than aggressive effort in various markets 
throughout the state. 

And so, it would be my hope that as the director of 
this agency, I might be able to offer some leadership to in fact 



10 

n 

12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 



42 



have it a much more aggressive agency, and have an agency that 
does its very best to ensure outreach to every part of this 

3 state. 

- 

4 SENATOR CRAVEN: Thank you, John. 

SENATOR PETRIS: I'm very happy to see Senator 



6 

7 
8 

9 ; 



10 

li 



Seymour here and hear the comment. He and I worked together on 
some housing things. In fact, he helped me bail out a program 
of mine a couple of times when I couldn't get any money out of 
the Governor, and he got it. So, I'm still grateful for that. 

SENATOR SEYMOUR: I wish there were some money around 
now to get, Senator Petris . 



12 SENATOR PETRIS: There isn't any now; that's right. 

13 

14 



The self-help program in particular. 

i 



By way of background, I want to point out that there 
are two or three problem areas I want to ask you about . 

When this statute was originally enacted, I was one 
of the original authors. It was principally Senator Zenovich, 
but I had a separate bill and we kind of merged them, and the 
emphasis was low-income housing, and then moderate, and then the 
rest. 

And after it got started, and the board was appointed 
by Governor Jerry Brown, I saw a series of decisions that dumped 
all the money upward, and hardly gave anything in the area of 
helping the poor. I was so outraged, I called the group and 
asked if I could meet with them. And I confronted them. I 
said, "What's this? Read the statute." You know, I think we 
have something here where the primary purpose is to meet the 
housing needs of persons and families of low and moderate 



19 
20 
21 

22 
23 
24 
25 

26 

|i 

27 : ! 



43 

1 income. That's the core of the statute. 

- And they were being totally ignored in Jerry Brown's 

3 administration in its first few months. Of course, they did 

4 improve on that and change it . 

• s But now we find that only 11 percent of all the loans 

6 or money that are being spent by that agency are going to this 

7 primary target, the lower income. 

8 Another thing they did in the beginning which I 
thought was not serving the purpose of the statute is, instead 

10 | of developing new housing for the poor, they were providing 
J 

11 loans for a higher level to buy existing housing. That didn't 

12 'increase our housing stock at all. They just bought the stuff 

• 3 that's out there, and they were supposed to develop programs for 

14 new units more and more. 

15 Now, I'm told now that — this is what I wanted you 

16 to comment on — we had a Legislative Analyst report a couple 

17 years ago that found that only 11 percent of the beneficiaries 

18 of the CHFA loans were low-income households, as defined by the 

19 statute. 

20 So, I'd like to know what your reaction is to that, 

li 

21 and what you are doing, or hoping to do, to correct that. 

22 Secondly, the agency's been criticized, as it was 

23 then, for allocating nearly all of its loans for the production 

24 of single-family housing rather than multiple. Now, that's gone 
-• 3 back and forth. There were periods when multiple housing got 

26 more. But they seem to be drifting back to those who can afford 

the single-family housing, and the multiple dwellings are being 
28 given a secondary or maybe third or fourth position. 



8 
9 

in 
11 

12 



44 

So, starting with the 11 percent, can you comment on 
that from what you've learned -- I know you've been there a 
short time -- as to whether that represents carrying out of the 
mission or not, and what your reaction and plans would be to 
correct it. 

6 SENATOR SEYMOUR: Well, Senator Petris, first of all, 

let me try to go to the bottom line, so to speak. My attitude, 
as I said earlier, is to have a much more aggressive agency. 
Aggressive in the functions that it has provided — the housing 
that it has provided. 

To the degree that we can utilize the assets of CHFA 
in such a way to become more aggressive in ensuring just low, 

13 not moderate or affordable, I want to do that. 

14 Let me, however, exercise a word of caution. CHFA 

jj 

15 was set up by the Legislature, as you know because you were a 

16 leader and in the forefront in the creation of this agency, it 

17 was set up as an agency to not be a drain on the General Fund, 

18 in essence, and it isn't. CHFA is self-supporting, as you know. 

19 In that process, therefore, if we're going to 

- () continue to be a self-supporting agency and not dependent upon 

21 the General Fund for funding, then in fact when it comes to 

subsidy — and that's the easiest way, as you know, Senator 

Petris, the easiest way to help those families and individuals 
i, 
who area in the low-income categories, is a direct subsidy of 

their rent or purchase. To the degree that CHFA were to too 

aggressively pursue that agenda at the expense of the part of 

] i 

the agenda that does return if you call it profit — it's not 

l| 

28 profit, but reserves — to the agency, to the degree we do it at 



25 
26 
27 



45 

the expense of that, we'd be back here for money. I don't want 
to see that happen in the agency. 

On the other hand, having said that, let me, if I 

4 can, explain how I see the agency becoming more aggressive. 

j 

5 First of all, I want to be and I want to put the 

i 

agency's energy in strong support of a G.O. bond issue. You're 



3 



b 



7 going to be part of that, the other Members of the Senate, the 

8 ^Governor, the Assembly will be part of sizing that housing bond 

I 

9 issue. And hopefully, supporting it with the electorate. 

10 That will revenues to which — which can be used in 

11 more subsidies. So, that's point number one. 

12 Point number two, if we could identify some other 

13 source of revenue, ongoing revenue, the agency could do even 



14 



more aggressive job than I'd like to see it doing. But without 

15 additional source of revenue, we are reliant on the reserves 

16 that were initially appropriated by the Legislature and that 

17 have been enhanced by primarily the end of the portfolio that 

18 produces reserves. 

19 Thirdly, however, let me say, Senator Petris, that I 

20 think we have the opportunity, and I've been meeting with 

21 various nonprofit housing groups since I came on board, to 

22 explore ways in which we can, in fact, be more aggressive. And 
jit seems to me what I'm hearing from them is the way we can do 

24 that is, we have to work more closely with local housing 

I authorities and agencies that have some source of revenue, one 
-° of which you're very familiar and every Member of this Committee 



27 
28 



i is familiar, I'm speaking specifically of the set-aside monies 

!j 

in redevelopment agencies as a result of tax increment. Those 



46 

dollars can in fact provide that kind of subsidy and help make a 
project — help bring it into a reality. 

So, I guess what I'm saying, in word, is, I want to 
take a much more aggressive posture, but mindful that this 
agency has got to be run in such a way that it is 
self-sufficient. 

SENATOR PETRIS: We also have a partnership with the 
private, both profit and nonprofit. 

SENATOR SEYMOUR: Yes. I have met with that 
partnership, and I know you were — you were part of leading in 
that legislation. I joined you in doing that. 

SENATOR PETRIS: Yes, you were helpful. 

SENATOR SEYMOUR: I've already met with them, and 
they have promised to play a continuing role with me to try to 

15 achieve the objective. 

16 SENATOR PETRIS: Two other areas; one is gender. As 
we all know in reviewing the statistics on poverty, a growing 
number of people who are becoming dependent on help are women 
with children, single parents with children. They're having 
difficulty getting into some of the programs. 

The second is geographic. A large percentage, I 



7 

i 

8 
9 

10 ! 

11 

I 

12 :! 

;t 

13 { 

14 I! 



22 
i 
I 

23 



think 25 or more, in the immediate — your immediate 
predecessor, were granted in certain parts of the Valley from 



Sacramento to Fresno, closer to Fresno. Which in part is 

iiunderstandable, because the director was from Fresno, and he 
-6 I 

ii wanted to beef up the stock in his county, and I commended him 

I 

jfor that, but it seemed to be an imbalance. 

28 

I worked closely with him on a lot of things, and I 



47 

1 thought he did a good job, too. I think you're right. 

I think we need to look beyond the figures, which I 

3 think were 25 percent for that area. And I'm going to do the 

4 same thing he did by pointing out that, well, Alameda County was 
about 2 percent. So, I guess I'm making a pitch for Alameda 

6 County, which puts me in the same boat as the prior director in 

7 trying to help my home county. 

8 Anyway, it was clearly a disproportionate amount. 

Q I- 

v Let's see if I can get the correct figures so I'm not misleading 

10 you. It said between 1983 and 1989, Sacramento and Fresno 

11 received almost 25 percent of all loans. That's the two areas. 

12 While L.A. and Alameda together received about 11, and I think 
'^ Alameda's portion of the 11 was very small. 

14 So, I would like you to examine a better proportional 

15 allocation of those loans on a geographic basis as well as the 

ij 

16 income basis. 

17 Now, I don't think you're going to have the same 

18 problem, since your home base is Orange County, and there aren't 

19 too many poor folk there that need low-income housing. 

20 SENATOR SEYMOUR: To the contrary, there are. 



21 



SENATOR PETRIS: We're glad to accept your portion of 



the allocation. I know there are some, but in comparison to 
*■* Alameda County, for example, and some of the others. 

Well, anyway, those are the areas of my concern. 

Beyond that, Mr. Chairman, as I say, Senator Seymour came to the 

I 

!| Senate with a reputation of being a very tough-minded 

"}T II 

conservative businessman who was Chairman of the whole 
28 California Real Estate Association, and had done a lot of work 



j 

25 



48 

in that field, and he wasn't too friendly to the low-income 
housing programs. 

But I found him to be different. Now, he either 
changed, which is to his great credit, or he felt that way all 
along. But he was very helpful to me in some of my key efforts, 
one or two of which I mentioned, and was responsible for getting 
the funds for one or two of the programs that would have died 
8 out. 

So, I know where his heart is. I know that in spite 

10 of the prior reputation for tilting, you know, toward all the 

11 commercial stuff, and upper-income and middle-income, he really 

12 has a concern for people at the bottom end of the scale. 
So, I feel very comfortable seeing him in this 

position. 



13 

14 



15 SENATOR CRAVEN: It's nice to hear that. 



16 Sometimes, as we all know, those of us fortunate 

17 enough to serve in this medium, we get type-cast at times, not 

18 necessarily correctly always. 

19 My experience with Senator Seymour is somewhat 

20 similar to your own, in that I followed on some of the things 

21 jthat he did before me, but the thing that always impressed me 
was, he was, in effect, a man of the people. He was not a 



25 
26 
27 



I! 

I 1 

r person who was holding on to the coattails of his party, at 



22 
23 

24 least in my judgment. He was quite independent in what he said, 
having served in the Caucus with him for a long time, and he 
having been my Caucus Chairman for many years . He was a great 

pragmatist, I thought. 

->* II 

-° Now, I think that's one of the best ways in the world 



49 

1 to solve problems, instead of being so, you know, cast in 

- cement. 

■* So, I think I've made up my mind I'm probably going 

4 to vote for him. 

5 [Laughter. ] 

6 SENATOR CRAVEN: How about you, Ruben? 

SENATOR AYALA: Well, having heard you say all those 

x good things, I don't have any questions. 
9 SENATOR CRAVEN: That's fine. You don't have to have 

10 any. 

11 SENATOR AYALA: I have one question, Senator Seymour. 

12 As you well know, the OPR did not suggest a specific 

13 funding source for the infrastructure of grants that the new 

14 authority would provide on the matching funds to local agencies. 
•5 Do you support efforts to provide a startup fund for 
16 the infrastructure bank from a statewide bond issue? 

" 7 SENATOR SEYMOUR: Yes, I do. And further, let me 

18 add, Senator Ayala, that I think that the personnel in 

19 functional infrastructure to run such a program resides in the 

20 California Housing Finance Agency. 

21 SENATOR AYALA: Do you think that the local agencies 

22 who are experiencing a tremendous growth factor, like my area 

23 that I represent, should have the authority to ask the voters to 

24 approve bond measures by a majority vote? 

25 SENATOR SEYMOUR: Yes, I do. 

26 SENATOR AYALA: That's the only question I have, Mr. 

27 Chairman. 

28 SENATOR CRAVEN: Very well, thank you. 



3 



10 
II 
12 
13 



50 

SENATOR PETRIS: I have one more. 

SENATOR CRAVEN: Yes, Senator Petris . 

SENATOR PETRIS: Where does an Army man go in the 
4 midst of all these Marines? 

SENATOR CRAVEN: Well, we're just delightful [sic] to 
have you here, Senator Petris. We know of your career in the 
United States Army as one of its officers, and we're very happy 
to have you here. 
9 SENATOR PETRIS: Thank you. 

SENATOR CRAVEN: No one wishes to comment in either 
direction back there in the audience? 

I don't think we really need to call in more 
sergeants today because the audience, you could probably control 

14 that group there, I should think, one each. 

15 All right, I'm ready to entertain a motion. 

16 SENATOR PETRIS: Move. 

SENATOR CRAVEN: Senator Petris tenders. 

Call the roll, please. 

SECRETARY WEBB: Senator Ayala. 
i 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

Senator Petris. 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

ji 

The vote is three to zero. 

SENATOR CRAVEN: John, your nomination is out. We're 



17 
18 
19 

20 
21 
22 
23 
24 
25 
26 
27 



51 

just sorry that we don't have our two colleagues with us to make 
it five-zero. 

SENATOR SEYMOUR: Mr. Chairman, thank you. 

And might I compliment, Mr. Chairman, your 
Appointments Consultant. Nancy Michel has done a superb job, 
very professional, in keeping me informed of the process as 
we've gone along. I just wanted you to know that. 

SENATOR CRAVEN: Thank you, we appreciate those 
comments, and we certainly agree with you. A very, very 
difficult job, and one where, unfortunately, she can stand by 
and take some abuse, which is probably not well directed at her, 
more probably at some of us, but she smiles through it all. 

But we appreciate your saying that and we 
14 congratulate you both. 

[Thereupon this portion of the 
Senate Rules Committee hearing 



16 



was terminated at approximately 
18 3:32 P.M.] 

19 



20 



24 
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27 
28 



— ooOoo-- 



8 

y 
10 

1 1 

12 
13 
14 
15 
16 
17 
IS 
19 
20 
21 
22 

23 

24 
25 
26 
27 
28 



52 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

/J IN WITNESS WHEREOF, I have hereunto set my hand 
this / ^ day of March, 1993. 



^EVELYN J. MTZAK 
Shorthand Reporter 




222-R 

Additional copies of this publication may be purchased for $5.00 per copy 
plus current California sales tax. 

Senate Publications 

11 00 J Street, Room B- 15 

Sacramento, CA 9581 4 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Senate Publication Number 222-R when ordering. 






HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




Dnci?ME^ T S OEPT. 

MAY 3 1993 

PUBLIC LibhAHY 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 






WEDNESDAY, MARCH 31, 1993 
2:03 P.M. 



223-R 






SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 31, 1993 
2:03 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR WILLIAM CRAVEN, Vice Chair 

SENATOR RUBEN AYALA 

SENATOR ROBERT BEVERLY 

MEMBERS ABSENT 

SENATOR DAVID ROBERTI , Chair 

SENATOR NICHOLAS PETRIS 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

TANDY K. BOZEMAN, Adjutant General 
State Military Forces 
State of California 

ED CONNOLLY, Journalist 
Palo Alto 

DAN GALPERN 
Davis 



Ill 



INDEX 



Page 



Proceedings 1 

Governor's Appointees: 

TANDY K. BOZEMAN, Adjutant General 

State Military Forces 

State of California 1 

Background and Experience 1 

Witnesses with Concerns; 

ED CONNOLLY, Journalist 

Palo Alto 2 

Role of State Military Reserve 2 

State Military Reserve in Los Angeles Riot ... 3 

Inability to Control Activities of State 

Military Reserve 4 

Role in Oakland Hills Fire 4 

Statements by SENATOR CRAVEN re: 

GENERAL BOZEMAN's Willingness to Review 

Role and Mission of State Military 

Reserve 4 

DAN GALPERN 

Davis 6 

No Funding for National Guard to Monitor 

State Military Reserve 7 

Questions by SENATOR AYALA re: 

Preparedness of National Guard to Respond 

to Future Acts of Civil Disobedience 8 

Coordination of Efforts with Local 

Authorities 9 

Comments by SENATOR CRAVEN re: 

Marine Corps 10 

Motion to Confirm 11 



IV 



INDEX (Continued) 

Intention to Hold Roll Open for 

SENATOR PETRIS 11 

Committee Action 11 

Termination of Proceedings 11 

Certificate of Reporter 12 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

SENATOR CRAVEN: We will go to Governor's appointee 
appearing today. This is Tandy K. Bozeman, Adjutant General, 
State Military Forces, State of California. 

General, if you would, please, come up, be seated. 
This sounds rather oxymoronic, but I was going to say to you, 
tell us why you feel you're qualified. It's hard to tell that 
to a Major General. 

In this instance, it is really an idea or a thought 
that occurs to us that we'd like to know how you feel about 
this, and what portions of your background you'd care to tell us 
about . 

GENERAL BOZEMAN: Well, sir, after six years on 
active duty with the Air Force, I've been in the National Guard 
since 1970. I think most of you are familiar with my 
background. 

In the National Guard, I've had a succession of 
positions of increasing responsibility. I was for almost four 
years the Base Commander. That is, the executive manager of one 
of the largest international Guard bases in the United States, 
which subsumed 13 different functions, which varied from a 
medical facility to civil engineering. I was a Wing Commander 
at the same facility. I was the Commander of the Air National 
Guard, and most recently I've been serving as the Adjutant 
General, which all sum is nine years of executive direct command 
experience. 

SENATOR CRAVEN: Very well. 



Are there any questions of the Committee at this 
juncture? 

Is there anyone in the audience that would like to 
speak relative to this confirmation? 

This gentleman introduced himself earlier, so I know 
this is Mr. Connolly. 

MR. CONNOLLY: Right. 

SENATOR CRAVEN: Mr. Connolly, my gracious. I hope 
you're not going to go through that whole book. 

MR. CONNOLLY: Oh, I feel more secure having 
documents with me. 

SENATOR CRAVEN: Very well. 

MR. CONNOLLY: I appreciate the Committee's time. 

I wish General Bozeman the best in this new position. 
He has an impressive resume. We're not acquainted. 

But the reason I wanted to appear before you is to 
ask a few questions, because General Bozeman would be 
responsible not only for the National Guard, but for a little 
known volunteer civilian militia the state maintains that has 
proved to be a great deal of trouble, for which the state, in my 
estimation, no longer has any need. Many Legislators aren't 
even aware that California maintains and sanctions a volunteer 
militia which is organized as a replacement for the 
26, 000-member California National Guard. 

I wanted to ask General Bozeman what he anticipates 
the role of the State Military Reserve to be? 

GENERAL BOZEMAN: Well, I have to tell you honestly, 
is that the State Military Reserve has not been the primary 



focus of what I've done in the last 90 days. 

But I do know and Would agree that I think the roles 
and missions of the State Military Reserve do need to be 
reviewed. Its charter is to replace the National Guard if the 
National Guard were en mass mobilized. I think that's an 
unlikely possibility. 

And I would agree with you that I need to review that 
and to examine the roles and missions, and I intend to do that. 

MR. CONNOLLY: I'm happy to hear you say that. We 
talked briefly before the meeting, and apparently a lot of the 
episodes that have been reported about the SMR, you're not aware 
of. 

But for example, the — your predecessor, General 
Thrasher, as a result of the requirements mandated by the budget 
fiscal committees, quarterly reports or reported on the 
activities of the State Military Reserve because of 
controversies that were raised before the Legislature in the 
past. And in his most recent report in July of last year — at 
least, that's the most recent that I have -- he pointed out that 
units of the State Military Reserve, this unpaid, volunteer 
militia, showed up spontaneously in BDUs — that's battle dress 
uniform -- without the authority nor knowledge of the Adjutant 
General's Office, to participate in the Los Angeles Riots. 

Not only that, but an internal State Military Reserve 
report submitted to the Adjutant General's Office after the 
Riots indicated that a television station had filmed a member of 
the State Military Reserve preparing to go out on patrol with 
the National Guard, and that he was armed. 



And this comes four years after the Ways and Means 
Subcommittee heard testimony from General Bozeman's predecessor 
that he would apply very strict controls and very tight 
oversight to this militia. And I believe he had every intention 
of doing that. He assigned somebody who was thoroughly capable 
to supervise this militia, which was a paid position in the 
Adjutant General's department. And even that person, who was 
highly competent, was entirely unable to control the activities 
of this militia, which have ranged from unauthorized war games 
in national forests, riot exercises, advertisements for recruits 
in survivalist magazines. And the Military Department has been 
stymied at every juncture by the command of this state militia. 

They've — officers showed up in a jeep in the 
Oakland Hills the day after the big Oakland blaze, dressed, 
again, in camouflage gear. They, by chance, were encountered by 
a reporter from the Examiner , and they identified themselves as 
regular Army officers. And the man in the jeep, a Captain 
Barnes, was quoted on the front page of the Examiner , and 
somebody happened to notice that this guy had absolutely nothing 
to do with the regular military and was there on a 
reconnaissance mission with the State Military Reserve. 

SENATOR CRAVEN: If I may, Mr. Connolly, I don't 
doubt what you say is absolutely correct. I understand your 
concern. 

But I think that the General has answered your 
question basically that he would review that which has concerned 
you, and perhaps rightfully so, and that he feels concerned 
enough to do just that. 



Am I correct in that? 

GENERAL BOZEMAN: Yes, sir. 

We, in fact, are going to get together within the 
next two weeks to discuss that in some detail, which I look 
forward to. 

SENATOR CRAVEN: Would that be all right, Mr. 
Connolly? 

MR. CONNOLLY: I look forward to resolving this with 
the Adjutant General. 

SENATOR CRAVEN: You know, there are — I've often 
thought about the people who wear camouflage gear and go out in 
the woods, and they shoot paint at each other. I suppose that 
they enjoy that very much, and I'm, I guess, in no position to 
criticize them. I'm not intending to do so. 

But having had enough people shoot at me with 
something other than paint, I am not anxious to do that. 

But sometimes you get a type of person who would like 
to be involved with that; may not have the opportunity to enlist 
in the service and experience that first-hand, and it means a 
great deal to them. 

So, you know, you can't be critical of them, and I'm 
not. But you have different types of people, and they assume 
various roles, either vicariously or physically. 

MR. CONNOLLY: No one would have a problem with that, 
provided it's not done under state sanction. 

SENATOR CRAVEN: That's true. Well, of course, as 
the General has said, that wasn't done under state sanction. 
I'm sure General Thrasher said the same thing at that. 



But sometimes people have a tendency to take those 
things unto themselves, and it is also, at times, hard to 
control that, I suppose. 

Would you say that you could get a complete lock on 
all of the people who are associated with the Guard or its 
ancillary organizations? 

GENERAL BOZEMAN: I would like to think so, sir. 

SENATOR CRAVEN: Thank you. You would like to think 
so, and I think it would be very, very difficult to make assured 
the fact, you know, somebody's not going to be a, you know — 
what would I say -- a rugged individualist — those are the 
words I'm looking for — and may take off. 

Those are the things we hope to control, because I'm 
sure it's an anathema to good order and discipline. And those 
are terms I'm sure you've heard before, but I think they're 
appropriate . 

So, anything further that you would like to say or 
add? 

MR. GALPERN: Mr. Chairman and Senators, my name is 
Dan Galpern, and I have investigated this issue as a colleague 
of Ed Connolly's as well for the past three years. And I 
largely share his views on this. 

I would just like to add that I personally don't have 
much of a problem, although I have some problem, with people 
wanting to play survivalist games and so forth. But under the 
imprimatur of the state sanction of the State Military Reserve, 
I think it's highly inappropriate. 

The Legislature, in fact, last year zeroed out the 



funding for this unit. And so, there is now no funding for the 
National Guard to be monitoring these activities. I believe 
these activities need not exist. I don't think it helps the 
National Guard in any way. 

And I would like to work with the Adjutant General, 
whom, I believe, is of course extremely well qualified, as Ed 
Connolly, to figure out some piece of legislation to entirely 
eliminate this unit from the books. 

So, I look forward to working with you as well. 

SENATOR CRAVEN: Senator Ayala. 

SENATOR AYALA: It's been established that the 
General will review that program — 

SENATOR CRAVEN: Yes. 

SENATOR AYALA: — and make a recommendation to the 
Legislature in terms — I didn't even know it existed, to be 
frank with you. 

MR. GALPERN: Most people don't. 

SENATOR AYALA: It was something new to me. 

SENATOR CRAVEN: I think we should make the point, at 
least I hope that I'm correct in this, that none of that 
activity to which you have referred was done under the aegis of 
the Guard itself. Am I correct in assuming that, General 
Bozeman? 

GENERAL BOZEMAN: Certainly not arriving with 
weapons , and not to my knowledge . 

SENATOR CRAVEN: Yes. Well, that would be the point 
that I wanted to make. 

I think they've done this on their own, and they may 



8 

well have been associated with the militia, as Mr. Connolly 
referred to it. And I'm not saying that that's not correct at 
all. 

I interrupted you. You had some other comment? 

MR. GALPERN: Not at all. I agree with your 
comments, and I'm done. 

Thank you very much. 

SENATOR CRAVEN: Where are you gentlemen from, what 
part of the state? 

MR. CONNOLLY: I'm a journalist from Palo Alto. 

MR. GALPERN: I'm from Davis. 

SENATOR CRAVEN: Fine, very good. Well, it's nice to 
have you here, and appreciate you coming in and your testimony 
as well. 

Is there anyone else who wishes to speak? Senator 
Ayala. 

SENATOR AYALA: General, we've been hearing about the 
preparedness. We hope that it's not necessary, but civil 
problems, disobedience, might happen in Los Angeles as a result 
of the trials taking place now. 

There was a lot of criticism of the National Guard, 
how they conducted themselves in terms of responding when they 
did, and lack of ammunition, that sort of thing. 

Can you give us a progress report, and not into 
detail to give away our plans, but are we doing something to 
beef up that type of a problem so that we don't lose control, or 
as little as possible, if, Heaven forbid, something like that 
happened again? 



GENERAL BOZEMAN: Yes, sir. 

We have been intensely busy over the last several 
months. We have been doing civil disturbance planning. We have 
taken and devised detailed plans for four metropolitan areas. 
We've assigned senior command responsibility to each 
metropolitan area, and we've published and distributed the 
plans . 

We have — 

SENATOR AYALA: And you're coordinating your efforts 
with the local authorities? 

GENERAL BOZEMAN: Yes, sir. We are in constant 
communication, and in fact, the 40th Division meets weekly with 
the Los Angeles Sheriff's Department and the Los Angeles Police 
Department . 

SENATOR AYALA: Not only the Los Angeles area. This 
could explode anywhere in the state, you know. 

GENERAL BOZEMAN: Yes, sir. 

SENATOR AYALA: We've got to — 

GENERAL BOZEMAN: And we have contingency plans for 
four major metropolitan areas in California, and can, in fact, 
adjust, if it happens elsewhere. We have solved the logistical 
problems of the distribution of ammunition. 

Suffice it to say, sir, I can assure you, if there's 
a disturbance, there will be weapons and ammunitions when and 
where they're needed. 

We also have devised a crisis action team that in 
fact is capable of command and control of the National Guard, 
and tracking convoy movements so that it can be redirected, even 



10 

to such details as we've fielded an HC 130 with the capability 
of relaying radio traffic from -- directly from the convoy to 
our State Headquarters . 

SENATOR CRAVEN: It would appear that all the 
contingencies have been addressed, and that they are down on 
paper and mentally as well, I suppose, which is a commander's 
responsibility. And I think it's all been addressed very, very 
well. At least, that would be my impression. 

General, you have to excuse us here, but you're 
dealing with three Marines: Ayala, Beverly, and myself. 

SENATOR BEVERLY: How does he feel about the Corps? 

[Laughter. ] 

SENATOR CRAVEN: Better come up with the right answer 
now. 

GENERAL BOZEMAN: Don't accuse me of being a 
diplomat, but I will tell you, there is no one in uniform who 
does not respect the Corps, and I'll tell you that after this 
hearing. 

SENATOR CRAVEN: Thank you very much. I knew you 
were a great man when you walked in here . 

[Laughter. ] 

GENERAL BOZEMAN: You can quote me. 

SENATOR CRAVEN: It is a relief, I think, to have a 
person who is so well-versed, who has the background necessary, 
and who seemingly, through the planning offices of his staff, 
and those officers and enlisted persons involved, is really 
right up to the moment on what we're dealing with from the 
standpoint of the Guard. That's impressive to me. 



11 

I think if Senator Petris were here with us — 
Senator Petris will be here a little later — but he's a 
soldier, Senator Petris, or he has been a soldier, and I think 
he would be in agreement . 

Is there anybody else in the audience who wishes to 
comment? There appears to be none. 

Any other comments by the Members? 

SENATOR BEVERLY: Move we recommend confirmation. 

SENATOR CRAVEN: Senator Beverly moves. Call the 
roll, please. We're going to keep the roll open, too, for 
Senator Petris. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris. 
Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

SENATOR CRAVEN: The matter's out with three votes. 
Senator Petris will be here to cast another, I'm sure. 

Congratulations . 

GENERAL BOZEMAN: I take it, as a military term, I'm 
dismissed. 

SENATOR CRAVEN: You are dismissed. 

GENERAL BOZEMAN: Thank you kindly, sir. 

[Thereupon this portion of the 

Senate Rules Committee hearing 

was terminated at approximately 

2:26 P.M. ] 

— 00O00 — 



12 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand 
this ^ I s3-J day of March, 1993. 




. MIZAK \ 



'ELYN 'J. MIZAK^ 
Shorthand Reporter 



223-R 

Additional copies of this publication may be purchased for $4.00 per copy 
plus current California sales tax. 

Senate Publications 

11 00 J Street, Room B- 15 

Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Senate Publication Number 223-R when ordering. 






HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 

MAYS 1993 



SAl 






•jO 



wiJoVM*** 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, APRIL 14, 1993 
2:10 P.M. 



224-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, APRIL 14, 1993 
2:10 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR DAVID ROBERTI , Chair 

SENATOR WILLIAM CRAVEN, Vice Chair 

SENATOR RUBEN AYALA 

SENATOR ROBERT BEVERLY 

SENATOR NICHOLAS PETRIS 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

ELOISE ANDERSON, Director 
Department of Social Services 

JOHN R. BANUELOS, Director 
Department of Boating and Waterways 

JOHN D. HEALY, Chief Deputy Director 
Department of Social Services 

FAYE M. CROSLEY 
AMARCH, Richmond 

ALFRED C. SIMMONS 

African-American Foster Group Home Association 

FREDERICK MURPH, Senior Minister 

First African Methodist Episcopal Church 

Oakland 

KEN MSEMAJI 

United Domestic Workers of America 

VIVIANNE DUFOUR, President 

League of United Latin American Citizens 

JACQUES S. WHITFIELD, Corporate Counsel 

J.J. Friendship Homes, Inc. 

AMARCH 

SENATOR PAT JOHNSTON 



Ill 



INDEX 



Page 



Proceedings 1 

Governor ' s Appointees ; 

ELOISE ANDERSON, Director 

Department of Social Services 1 

Background and Experience 1 

Questions by CHAIRMAN ROBERTI re: 

In-Home Supportive Services 6 

JOHN D. HEALY, Chief Deputy Director 

Department of Social Services 7 

Background and Experience 7 

Both Above-Named Nominees Questioned as a Team 15 

Questions by SENATOR AYALA re: 

AFDC Projected Caseload 15 

Percentage of AFDC Population Due to 

Influx from Other States 16 

Questions by SENATOR PETRIS re: 

Closing of Two Field Offices in Contra 

Costa County 17 

Current Status of Dispute 17 

Possibility of Losing $3 Billion 18 

Problem of Access 19 

Lack of Definition from Feds 20 

Agencies Involved in Meeting 21 

Level of AFDC Grants vs. Needs 22 

Request for List of Available Jobs .... 24 

Proposal for Cuts 24 

Estimate of How Long People Stay on AFDC .... 26 



IV 

INDEX (Continued) 

Percentage of Teen Mothers 27 

Average Time on Welfare 2 9 

Grant Rates vs. Needs 31 

Lower Rents than Anticipated 32 

Witnesses in Support: 

FAYE CROSLEY 

AMARCH, Richmond 35 

Questions by SENATOR PETRIS re: 

Ability to Support Family on 

Minimum Wage 35 

ALFRED C. SIMMONS 

African-American Foster Care and Group 

Home Association 38 

FREDERICK 0. MURPH, Senior Minister 

First African Methodist Episcopal Church 

Oakland 40 

KEN MSEMAJI 

United Domestic Workers of America 42 

VIVIANNE DUFOUR, President 

LULAC 45 

JACQUES WHITFIELD, Corporate Counsel 

J.J. Friendship Homes and AMARCH 46 

Motion to Confirm Both Appointees 47 

Committee Action 48 

JOHN R. BANUELOS, Director 

Department of Boating and Waterways 48 

Introduction by SENATOR PAT JOHNSTON 48 

Background and Experience 49 

Motion to Confirm 53 

Committee Action 54 

Termination of Proceedings 54 

Certificate of Reporter 55 



P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN ROBERTI: We have before us Eloise Anderson, 
Director of the Department of Social Services, and John D. 
Healy, Chief Deputy Director of the Department of Social 
Services . 

Ms. Anderson, we will start with you and ask you why 
you feel you're qualified to assume this position? 

MS. ANDERSON: Thank you for the opportunity to talk 
to you a little bit about myself and why I feel I am qualified 
for the position of Director for the Department of Social 
Services . 

I was born 51 years ago in a place called Toledo, 
Ohio. Toledo, Ohio at that time was a blue-collar community, 
and I was raised in a blue-collar community that was hard 
working and very proud, pretty industrial, very heavily into the 
auto industry and pretty heavily into the glass industry. Some 
people in that community came from the south looking for freedom 
and a better place to live, to work, and raise their children. 
Also, there was a large number of people who came from Eastern 
Europe in search of the same thing: freedom and a better place 
to raise their children. 

I also grew up Catholic, went to Catholic schools, 
then into public high school, and then into a public university. 
So, my views of life were very much created by my life as it was 
in Toledo, Ohio, as a kid growing up in a very blue-collar 
community. 

I grew up in a time that was called "The Peaceful 



'40s and '50s". I saw domestic abuse, drug abuse better known 
as alcoholism. I saw strong families; I saw families with 
mothers only because, remember, I came along during the war, so 
a lot of fathers did not come back, and women had to raise their 
children by themselves. I saw racial discrimination. I saw 
religious discrimination. Being a Catholic was in those days — 
very much had a prejudice against. So, I saw a lot of that, of 
religious intolerance. 

And I saw — probably the most important thing, I saw 
a lot of intolerance in terms of how people thought and 
believed, and that also played an impact on how I think and 
believe and see the world. 

I also grew up in a family where my father was a 
life-long Republican and my mother was a Democrat, and my mother 
was a union organizer, so you know, at the family table, we had 
quite a few different discussions going on. So, I also grew up 
believing that there was more than one way to think about 
something, both politically and otherwise. 

I did not start my career out as a public servant. I 
started out as a community organizer and a social worker in what 
we called a settlement house. I come out of the Jane Adams 
movement of settlement houses. 

In Milwaukee, about 27 years ago, maybe closer to 30 
years ago, I worked in a social service agency and wrote the 
first component for social services in Head Start and helped 
start the first Head Start for the City of Milwaukee. 

I also developed youth programs to prevent juvenile 
delinquency, and I worked with about 200 families who were then 



on what we called a program called ADC, which is now better 
known as AFDC, to work with mothers to get them back to work. 

I moved from private human service work into the 
public arena, and when I moved into the public arena, I moved in 
as a municipal management consultant, working for the State of 
Wisconsin. And my responsibilities were working with counties, 
and I worked with what we called the "Iron Ring", which was 21 
cites that surrounded Milwaukee County and -- surrounded the 
City of Milwaukee and Milwaukee. 

I moved from there to becoming an employment 
relations specialist. An employment relations specialist in our 
— in the State of Wisconsin was a person, and still is a 
person, who arbitrates contracts, helps develop the union 
contracts, and represents management at the arbitration level. 
So, I worked in that arena as well. 

I moved from state service to work in the county, and 
at the county I worked as the executive assistant for the County 
Exec. And Wisconsin county executives are elected officials. 
They are the second-most powerful position in the state, unlike 
the State of California, where they're appointed. They are 
usually county-wide elected positions, and we have quite a few 
of those in Wisconsin. 

And in that case, I was the executive assistant to 
Dane County, which is our second-largest county in Wisconsin, 
and all the departments reported to me, and we had everything. 
I tell people that I oversaw everything from airports to zoos, 
because we did have an airport and we did have a zoo. 

I left there and went to work for the Department of 



Health and Social Services in Wisconsin as the Division 
Administrator for the Division of Community Services. Our 
organization is very different from the organization here. What 
would in this state be several departments were all within my 
Division. I oversaw Aging; I oversaw Long-term Care, and this 
was long-term care for people who were physically disabled, 
people who were mentally ill, and people who were aging. I 
oversaw the Alcohol and Other Drug Programs . I oversaw Mental 
Health. I oversaw Child Welfare. I oversaw Juvenile 
Delinquency. I oversaw the Office of Economic Opportunity. I 
oversaw the Day Care. In this state, Day Care is in the 
Department of Education; in that state, it was in my Division. 

I also oversaw Licensing. Licensing was for group 
homes, child caring institutions. I also oversaw certification. 
In the State of Wisconsin, if you're going to provide alcohol 
and other drugs or mental health services, your facility must be 
certified. I also oversaw the certification of those 
facilities . 

I also oversaw AFDC, and like California, Wisconsin 
is a county-run state. And I also oversaw Child Support. 

So, I believe my work effort is pretty much in -- 
consistent with what I've done in the past. 

My volunteer effort, I think, ranges the same kinds 
of areas as my work experience and my life experience. I have a 
couple things I am very proud of. Unlike many of the people in 
my age group who went off to the Peace Corps, I stayed home. I 
was a member of VISTA instead and supervised VISTAs. I thought 
that my place was here, to make changes in our own community and 



not to run overseas someplace and make those changes. 

I was on the Equal Rights Council for our state. I 
was a member of the Urban League, and I also — one of the most 
important roles that really got me to look at education, I was 
on our state Voc-Tech Advisory Council. In the State of 
Wisconsin, we have what we call vocational schools, that you 
would put very similar to your community colleges, expect the 
emphasis is vocational education and not necessarily two-year 
degrees . 

I was on the Board of Catholic Social Services. I 
was also on Dane County's Manpower Consortium. It was what 
became JEPTA programming. Here, it would be considered the PIC; 
there, it was considered the Manpower Consortium. I was also on 
that board, and I was on the Board of Public Welfare for the 
County. 

And my only ever elected official position, I was 
Board President -- the Board President for the Black Hawk Girl 
Scout Board, which covered nine counties in our state. And I 
was on — the chairperson for the Interagency Council for Birth 
to Three, that dealt with disabled children. And I also on the 
Board of Trustees for the University of Wisconsin, and I sort of 
cherish that particular appointment, because I was a Republican 
who was appointed by a Democrat, Donna Shulayla, to that 
position. 

And I was also a sergeant in the U.S. Army Reserves. 

So, I think my — my experience — 

CHAIRMAN ROBERTI : You have a breadth of experiences . 

MS. ANDERSON: — make me prepared for this job. I 



sort of kind of looked at this job as that it had my name on it 
a long time ago. 

CHAIRMAN ROBERTI: So here you are. 

MS. ANDERSON: Yes. 

CHAIRMAN ROBERTI: In-Home Supportive Services has 
been cut back over past budgets, and I suspect that's another 
problem we're going to have to be facing. We're getting more 
and more elderly ill that are depending upon this. 

Do you have any program or any way of dealing with 
it, or what are your programs? 

MS. ANDERSON: Deal with In-Home — 

CHAIRMAN ROBERTI: Yes, as advocacy, or with the 
Administration, or ways of expanding it even though we're not 
going to be able to have the added dollars. What brain power 
are you putting to this? 

MS. ANDERSON: Well, I've done a couple of things. 

When I came in, the Department had a division called 
the Division of Adult and Children. And one of the things that 
was very clear to me is that the way we were organized was not 
going to give either one of these arenas equal treatment within 
the organization. So, I separated the Division, now creating an 
Adult Division and a Children and Family Division. I put a 
person at the head of that Division who I thought was sensitive 
to the issues of the elderly who are frail, sensitive to the 
physically disabled, and sensitive to other people who are in 
need of long-term care, as well as the adult population who 
needed to have some watch over them. 

We have just been granted a movement in terms of the 



implementation of a personal service contract, which will help 
us to provide some very different kinds of supports to some of 
the people on — who are on In-Home Supportive Services. So, I 
think that, together with personal care option, begins to help 
us do some things with limited resources. 

My view, in terms of how we've organized this over 
the years, is that we really need to look at how we can more 
efficiently do what we have if we're going to continue to have 
limited resources. So, I put a major effort into paying 
attention to that. We're going to be developing a task force 
with — in fact a letter, I approved the letter about a week or 
so ago, to develop a task force to look at how we can best come 
around the table around Adult Services, and physically disabled, 
and the elderly who are frail. 

So, I think that you will see out of our 
administration a real effort to — to support this in any way we 
can. 

CHAIRMAN ROBERTI: Thank you. 

Any other questions of Ms. Anderson? 

Maybe we should take Mr. Healy's statement first, and 
then we'll go back to questions. 

Mr. Healy, why don't you tell us why you feel you're 
qualified to assume this position? 

MR. HEALY: Thank you, Mr. Chairman, Members of the 
Committee, for the opportunity to present myself before you for 
your consideration of my appointment as Chief Deputy Director of 
the Department of Social Services. 

I will keep my comments brief, I — probably less 



8 

than five minutes. I hope to give you a sense of who I am, what 
my experiences have been, and what I bring to this job. 

On a personal note, I've been married to my wife, 
Joanne, for 14 years, and I have one child, a 10-year-old son 
named Christopher. I'm a second generation Calif ornian, born in 
Los Angeles and raised in the San Bernardino area. I attended 
Holy Rosary Elementary School, St. Thomas Aquinas High School, 
and graduated from California State Polytechnic University, 
better known as Cal . Poly, Pomona, with a degree in political 
science. 

I am the first and only member of my family to — to 
graduate from college, and I'm the only member of my family to 
ever work in the public sector. 

Eloise commented about growing up in the '40s and the 
'50s, and I grew up in the '50s and the '60s. And I grew up in 
an Irish-German Catholic home environment, and we had plenty of 
opportunity during the '60s to discuss nightly issues that are 
of importance, social, political issues, the Vietnam War, and so 
forth and so on. We had nightly arguments, discussions. I 
think it was during the '60s when I had that environment and 
those kinds of dialogues, if you will, with my Mom and my Dad 
that I began having a focus and a commitment to wanting to work 
in the public sector. 

I think if my Dad was here — he is alive — but I 
think if he was here at this table, and we were continuing to 
have these discussions, he'd probably tell you that I've become 
a little bit more — more practical as I have matured, and I'd 
probably sit here and tell you that he's become a little bit 



mellow as he has aged. So, we still have the same dialogue on 
issues . 

My — my interest in government service, I think, 
took focus and became much more cemented in — in the context of 
a career when I visited Sacramento in 1967. I was a member of 
the California Boys' State Delegation. I represented the San 
Bernardino area when I came up here. For me personally, it was 
one of the most invigorating experiences that I had ever had in 
playing for a week on being a legislator, and being a mayor of 
the city, and coming over and engaging with my -- my 
representative at the time, and seeing the legislative process 
in action. 

CHAIRMAN ROBERTI: You were mayor of — 

MR. HEALY: I was a mayor of a city at Boys' State, 
yes . 

[Laughter. ] 

MR. HEALY: Invigorating experience. I can't tell 
you the laws that I passed. 

Anyway, I think for me, that was a very, very 
important time in my life, and that helped shape -- shape where 
I was going, and cemented my commitment to wanting to work in 
the public sector. 

As I mentioned earlier, I went to college and 
received a degree in political science. Immediately upon 
graduating from college, I came into the State Civil Service. 
I've been with the system; I've been with the state for — for a 
little in excess of 20 years now. I started in the State 
Personnel system, where I had experience in labor relations, and 



10 

selection, classification, and things of that ilk. 

I was very fortunate in the late '70s to receive a 
career executive assignment in the Employment Development 
Department. I had responsibilities for policy development in 
the unemployment insurance, job service employment and training, 
and the disability insurance arenas, and I eventually ended up 
being the Deputy Director responsible for managing a 
7,000-person field operation that implemented those — those 
programs and those policies. 

In the mid-80s, in '84, I moved to be the Deputy 
Director of Administration for the Employment Development 
Department. I had the typical responsibilities of personnel, 
budgeting and automation, et cetera. 

I share this with you because it was during this 
time, this 10-12 year period with the Employment Development 
Department as a career executive, that I — that I basically 
learned my management style and developed what I consider to be 
the guiding principles for how I operate. 

Some of those guiding principles would be: a 
recognition of the importance of communication, both within an 
organization as well as outside of an organization; the 
importance — and some of this might sound somewhat contrite to 
you, but I do think it's terribly important, they are guiding 
principles for me personally — integrity, the integrity of 
myself, the integrity of any part of my organization that I have 
responsibility for; a recognition of my authorizing environment; 
the relationship with the Legislature; the relationship with the 
public; and the importance of always trying to bring forth the 



11 

best information available to all people concerned. 

Another guiding principle for me personally is access 
and participation. I think people that are affected by our 
programs, affected by our policies, have got to be given 
opportunities to have access to the decision-making process, and 
in particular, participate at the early stages, when policy is 
being formulated. 

Within the organization, I think it's incumbent upon 
a management team to create an environment for every employment 
— where every employee believes they have the opportunity to 
contribute, and in fact do have an opportunity to contribute, 
And I think equally important, to reach their full potential. 

Also during this time, I started to get a very keen 
appreciation for the importance of the scarce public resource 
and the importance of the public trust. We've all worked hard 
on trying to figure out our priorities over the last decade, and 
we will continue to do so. The demands and competition for the 
scarce public resource continues to be a primary concern and 
consideration for all of us involved in the public service. 

I think it was in part this — this issue relative to 
the competition and the necessity of creating priorities on the 
public resource where I developed a passion, if you will, for 
the strategic use of information technology in furthering the 
way we deliver services. Information technology can have a 
tremendous impact on improving the levels of services that we 
provide the public, and it can also have a significant impact on 
reducing the cost of the delivery of those services. 

When at the Employment Development Department, I 



12 

played a very significant role, a leadership role, in basically 
automating every business function in that organization: the 
collection of the payroll taxes; the automation of the job 
service labor exchange for the State of California; the 
automation of the unemployment insurance program; and the 
automation of the disability insurance program. I received a 
Senate Resolution acknowledging that, and I received a plaque in 
honor from the Information Technology Management Forum from the 
State of California, acknowledging the role that I played. 

When I was asked by — by the Agency Secretary for 
the Health and Welfare Agency if I was interest in becoming and 
being considered for the Chief Deputy Directory of Social 
Services, I — frankly, I didn't think it had my name on it, but 
I certainly leaped at the opportunity. I felt that my 
experience would be very beneficial, that I could have a 
positive impact. And I think equally important, I feel that the 
programs that the Department of Social Services is responsible 
for, either directly or as an oversight body over the 
administrative entities of the county, are some of the most 
important, compelling social programs that we've got in 
operation for the State of California. 

I've been with the Department for 16 months. I came 
over as the Interim Director at the request of coming over as 
the Chief Deputy. It took longer than I expected, and then I 
was appointed Chief Deputy when Eloise was — came on board. 
During that 16-month period, I want to share with you a couple 
activities that I have been engaged in that I think clearly 
demonstrate my commitment to the previously mentioned guiding 



13 

principles . 

One of the issues that — that came to me when I 
first came on board, I went out to the legislative staffers. I 
went out to the community, and I told everybody that I could 
talk to about my — my — the importance of access, my 
commitment to participation in opening the decision-making 
process in the Department. 

One of the very first issues that came to me from the 
District Attorneys' Association, from the Family Support 
Council, from various Legislators and legislative staffers, was 
concern over the lack of a visible presence, if you will, in a 
leadership role in the Department in the area of Child Support. 
As a result of that, I put together in very short order a very 
comprehensive effort, brought in staffers, brought in the 
district attorneys' staff, brought in the DAs themselves, the 
Family Support Council, my own staff, and over a three-month 
period, we developed a very comprehensive five-year plan for the 
Child Support program that resulted in 10-11 pieces of 
legislation being passed with obvious support and cooperation 
and in partnership with the Legislature. 

Another significant issue that came to me is actually 
a very hot issue, as I arrived in the Department, was the 
Community Care Licensing program. There were round-table 
discussions going on. Senator Bill Greene had chaired a number 
of them, Senator Diane Watson, and Assemblyman Tom Bates. It 
was clear from the information that was being provided at those 
round-table discussions that there were significant concerns in 
the community with the manner in which the Community Care 



14 

Licensing program had been operating, and I worked very 
intimately and very closely with those -- those individual 
Legislators, as well as the interest groups, and we ended up 
implementing a ten-point plan to make significant improvements 
in that program. 

Senator Petris, I don't know that he would remember, 
but he participated in a — in a group setting with providers 
down in Oakland where some of these issues were discussed. And 
I presented to them the kinds of changes that we were about to 
make, and I heard from them some of the concerns, and in many 
cases, the applaud for those changes. 

Those are examples that I think demonstrate what I 
said about living the guiding principles. 

Lastly, and I really — I don't think we can 
overstate the importance of bringing information technology into 
the Social Services arena. I think what we have in the State of 
California should be an embarrassment. We have an AFDC program, 
we have a Children Welfare Services program, we have a Child 
Support program. We've got 40-50,000 different employees at the 
state and the county levels, trying to carry out the 
responsibilities of those programs, and we don't have the 
information technology tools to help them carry out those 
responsibilities. That is a major responsibility. 

We have got a very aggressive, very assertive effort 
dealing with that. We have reorganized the organization to 
develop an Information Technology Division. We have brought in 
some very talented people. We have the cooperation and support 
of the County Welfare Directors' Association and the County Data 



15 

Processing Managers' Association. We have the Children Welfare 
Services automation project of over $100 million that we have 
now under way, and we have a contract with a vendor working with 
us to develop that system. We have the Child Support automation 
system that's about $84 million under way, approved, being 
largely funded by the federal government. We have contract with 
our vendor, and we have federal approval, and -- and county 
support for moving forward with an automation program for AFDC. 

I think it's probably going to be a five or six-year 
effort to bring these to fruition. We're talking about probably 
a billion dollar investment, but I think it's one of the most 
long-term, most important, far-reaching things that we can 
commit ourselves to. 

And I think I bring talent and skills and experience 
to that challenge, and I hope for the opportunity to -- to play 
it out, so thank you. 

CHAIRMAN ROBERTI: Thank you, Mr. Healy. 

Are there any questions? Senator Ayala. 

SENATOR AYALA: I guess it's to both of you. 

I think that the Department of Social Services is 
probably the most misunderstood agency in the State of 
California. 

A year ago, the Governor indicated that the AFDC 
caseload was rising at 10 percent. Your Department put out a 
statement earlier this year that either they were going down or 
they were remaining at the same level . 

What do you attribute that to? 

MS. ANDERSON: I think - 



16 

SENATOR AYALA: Good management? 

MS. ANDERSON: I think there are a variety of things 
that contribute to that. Some of that we don't know, some of it 
we do know. 

I think that some of the reforms that have been done 
in the past have played some impact on that. I think that the 
issues that we don't know about, we can't really speak to. 

We believe that some of our work programs that have 
been operating have played some impact on that, and then the 
rest of them, I don't think we can — we can really speak to. 

You know, when we project, we project based on what 
has already happened in the past. So, if you look at the 
caseload rate, it is still growing at a rate faster than the 
population growth is going. So, even though it may not be as 
high as we had projected, it is still higher than population 
growth. So, we need to be concerned about that. 

If anything, if we had any growth in there at all, 
which we wish we wouldn't have, it ought to be equal to or close 
to population growth, and it's still way beyond that. So, we 
are concerned, even though it is not as high as it was, and we 
don't have the answers to all that yet. 

SENATOR AYALA: What percentage do you believe of 
California's AFDC population is here due to the fact that we're 
told that our AFDC grants are higher than neighboring states? 
Do you have any idea of what percentages of folks have come as a 
result of that? 

MS. ANDERSON: According to the data, it's about 
seven percent on an annual basis. However, the annual basis 



17 

then floats in to be a part of your total population. So, if 
you get seven percent a year, and they go into your population, 
over time they become more than seven percent. Next year 
there's fourteen, and next year's it's added up. 

So, I can't speak to how many right now are on the 
grant who came here because they were interested in coming for 
higher grants , but seven percent each year does add up over 
time. 

SENATOR AYALA: Thank you. 

CHAIRMAN ROBERTI: Any other questions? Senator 
Craven. 

SENATOR CRAVEN: Do you want to take these 
separately, or are they a team? 

MS. ANDERSON: We are a team, sir. 

[Laughter. ] 

CHAIRMAN ROBERTI: Senator Petris . 

SENATOR PETRIS: I'd like to ask some questions about 
Contra Costa. You had a big flare-up there with the closing of 
some field offices in the two poorest communities in the whole 
county, which I happen to represent. One is El Sobrante and the 
other is Richmond. And Richmond's the largest city in the 
county and has the largest number of poor people, and so forth. 
And there ' s been an exchange of correspondence back in forth 
involving the U.S. Department. 

What's the current status? Have those disputes been 
resolved now? Are the offices going to remain closed, or are 
they open, or what? 

MS. ANDERSON: If I could say, it's probably a little 



18 

bit, or as we speak, those issues are being resolved. And we 
believe that they're going to be resolved to the satisfaction of 
the Federal Office of Civil Rights. 

If you're not — Contra Costa County never went 
forward with their plan. They produced a plan, and they have 
not implemented that plan. And I think that as we look at it 
from this point, that it will be resolved in a manner that is 
satisfactory to the Complainant, satisfactory to the County, and 
satisfactory to the federal government. 

What we have tried to do — 

SENATOR PETRIS: Does that mean that we won't lose 
the $3 billion that — 

MS. ANDERSON: We've never been — it has never come 
to my attention that $3 million was in jeopardy. 

SENATOR PETRIS: Well, it's come to a lot of other 
people's attention, because they've made that clear to me. I 
haven't got a letter from the U.S. people, but those working in 
the area seem to feel that if we do close those offices without 
the hearings and so forth, especially, that we're in big 
jeopardy. 

Is that part of the subject that's being — 

MS. ANDERSON: Yes, the public hearing — 

SENATOR PETRIS: — resolved? 

MS. ANDERSON: What the plan is going to be is the 
public hearings, and impact of whatever Costa County decides to 
do, and what kind of impact will that have on the issues that 
were brought forward to us, which was Richmond and the other 
community. 



19 

SENATOR PETRIS: I understand, I know you're new 
here, and hopefully you'll be able to visit the county sometime, 
along with all the rest of the counties. 

But the problem, one of the problems there is access. 
People who are cut off in Richmond by having those offices 
closed have to go all the way to Martinez. That's a long way. 
It's probably half the width of the State of Wisconsin at 
certain portions of it. That's a wild guess. It may be — 

MS. ANDERSON: We have few people, but we've got a 
lot of ground. 

SENATOR PETRIS: Well, we'll measure it sometime, but 
anyway, it's a long way off, and the people are poor. And 
there's no public transportation that'll take you from one end 
of the county to the other. People do a lot of driving of their 
own automobiles there, so it poses a very grave question. 
That's one of the reasons for the concern. 

MS. ANDERSON: In the plan that Costa County — the 
original plan in which they proposed for -- it did have 
accommodations for transportation for people who were without 
transportation to get them to the central office. They dealt 
with all those issues within their plan. 

John wanted to — 

MR. HEALY: Yes, Senator, the dollar amount issue 
that you raised is, to make you more comfortable, actually $3 
billion dollars is what the individuals that have come out from 
the Civil Rights Office from the Department of Agriculture. 

But to put that into some context, the — part of the 
problem here is that we do not have regulations . We do not have 



20 

process . We do not have instructions . We do not have 
definition from the federal government, either at the national 
level or at the regional level, on exactly what a county is 
supposed to do and the process that they're supposed to engage 
in when they have issues like this confronting them. 

And what has happened is — 

SENATOR PETRIS: Excuse me. 

Issues like what? 

MR. HEALY: Issues like — like attempting to 
consolidate service points, which is what they were attempting 
to do here . 

And so, the office that is out is from the Federal 
Department of Agriculture, and what they are hoping to resolve 
today is an agreement as to what kind of a process would need to 
be engaged in by the county, by the state, by the regional 
office of Food and Nutritional Services, as well as by the 
Federal Department of Agriculture, if the county proposes to 
move forward with any kind of consolidation of service points. 

The $3 billion is the total amount of money that we 
have in our food stamp program and other Department of 
Agriculture monies coming into the State of California. We 
don't have — this federal office is not out here doing an 
investigation. They're out here trying to reach consensus on a 
process that we should all engage in. 

MS. ANDERSON: I think one of the things that the 
federal government — federal office on this one is having 
problems with is that when they look at what the state is doing, 
they look at it from a state-operated system. We are a county- 



21 

operated system, so many of the issues that they put in front of 
us are really for state-run systems and not for county-run 
systems . 

And one of the other things that -- 

SENATOR PETRIS: Well, that's why the feds are 
concerned, because that's a lot of their money. 

MS. ANDERSON: We understand it's a lot of their 
money, but they don't have — when we were going through this 
process, we would ask the feds, "What is it that you expect? 
What's your expectations? What should we do?" 

And they never told us anything beforehand. They 
always told us things after the fact, after we did this, and 
they said, "Well no, you should do this." 

So, it was hard for us to try to figure out what is 
the federal expectation and meet that, and at the same time, try 
to be sensitive to the issues that were being brought in by the 
charge, and at the same time being sensitive to the county's 
needs, trying to put that all together, especially when the feds 
were doing the after-the-fact with us all the time. 

We think we're coming to resolution on what's going 
on. We don't think that it's going to be an issue. 

SENATOR PETRIS: Well, your letter of the 17th of 
February seems to be very optimistic about that, to the Contra 
Costa Legal Services Foundation. 

Who is involved in this meeting today, right now, to 
resolve it, which agencies? Is it everybody, the state, and the 
county, and the feds all meeting together? 

MR. HEALY: Yes, we have the feds at the national 



22 

level — 

SENATOR PETRIS: All three — 

MR. HEALY: Yes. 

SENATOR PETRIS: — Contra Costa or statewide 
problems? 

MS. ANDERSON: No, just Contra Costa and their — the 
advocacy group that brought the charges . 

SENATOR PETRIS: Made the complaint. 

MS. ANDERSON: Yes. 

MR. HEALY: Yes. 

SENATOR PETRIS: They're included. 

MS. ANDERSON: Yes, yes. 

SENATOR PETRIS: And your expectation is that that'll 
be resolved this afternoon? 

MS. ANDERSON: Yes. 

SENATOR PETRIS: Let me go to another subject. I 
notice in your extensive experience in Wisconsin, there's 
certain areas that we have that you didn ' t cover back there . 
One of them is the benefit payment level. 

There's been an awful lot of pain in this state in 
the last three years among the poor because they've been having 
— their grants have been cut and cut. In the judgment of a lot 
of people, they weren't high enough to begin with. 

You ' re not privy to those cuts , but you come into it 
at a season of one cut after another within a short time, within 
two or three years . 

Have you examined the level of grants and the needs 
on the outside to make your own judgment as to what is desirable 



23 

and do-able? 

MS. ANDERSON: I think that the proposal that you 
have in front of you, if we're talking about AFDC, which is what 
I think we're talking about, has been done in such a fashion 
that — and very few states have tried to do this — that the 
cuts can be replaced back by very few hours of work a week on 
the part of the recipient. And that is unusual of any state who 
has made a cut, and a lot of states have made cuts because a lot 
of states have faced the same kind of financial situation that 
this state has faced, but they've just cut without the ability 
for the recipient to work any of that part back. 

In the State of California, what the Governor has 
proposed is, if the recipient works part-time — 

SENATOR PETRIS: Where? 

MS. ANDERSON: In jobs in California. What we know 
is that there are jobs being created in the State of California. 
Just like you're losing jobs, you're creating jobs. 

SENATOR PETRIS: Can you give me a list of jobs 
available? I know a lot of people who'd love to have it. 

MS. ANDERSON: Well, we've got — you have a GAIN 
program in the State of California, and if we go out and talk to 
the counties who are running those programs, they will show you 
where people are finding jobs. 

Now, we're not saying that everybody's finding jobs, 
but a lot of people are finding jobs. There are a lot of 
service jobs. In fact, the EDD has put out a forecast to the 
year 2005 that says where the jobs are being created in this 
state are in the jobs in which many of the people on AFDC would 



24 

go after. 

No, there ' re probably not rocket engineer jobs out 
there. No, there ' re probably not aeronautical engineer jobs 
out there. No, there ' re probably not even a lot of attorney 
jobs out there. But a lot of the jobs are available for people 
with the skill levels of a lot of the people on AFDC. 

SENATOR PETRIS: Can you give me anything more 
specific, in which communities that's happening? 

MS. ANDERSON: I can send you some information on 
that, and I will be very glad to do that. 

SENATOR PETRIS: Can you tell me how many have 
actually been put to work since this proposal was made, or is 
the proposal still being considered and not adopted yet? 

MS. ANDERSON: No, the proposal -- the proposal for 
cutting is in front of you now, in front of the Legislature now, 

SENATOR PETRIS: Well, that's the current, but 
there 've been prior cuts, too, last year and the year before. 

MS. ANDERSON: And we can send you information back 
on who's been getting employment in the State of Wisconsin -- I 
mean, in the State of California in — 

SENATOR PETRIS: I wouldn't mind knowing about 
Wisconsin, too. 

MS. ANDERSON: — in the AFDC program. 

SENATOR PETRIS: All right. 

Now, with respect to the specific proposal you 
described, the Governor says, "We're going to cut your grant, 
but if you work a certain period of time, we will put you on a 
fast track to get back on the grant." 



25 

Is that what you're saying? 

MS. ANDERSON: No. 

With the -- the way the cut is designed is that, if a 
person goes to work, they can work back what they've lost on the 
grant without being penalized for that. 

In many cases, the way AFDC is structured, that if 
you work, you lose, and the way it's designed is that it's no 
benefit for you to go to work. 

The Governor has tried to change that around to give 
you what I would call some supports in working, to make work 
pay, so that you don't lose as much by working as you did under 
the old system. 

SENATOR PETRIS: Is that in place, or is that a 
proposal that he's floating — 

MS. ANDERSON: That's the proposal that you have in 
front of you, yes. 

SENATOR PETRIS: So that hasn't been acted on yet. 

MS. ANDERSON: No. I'm hoping that you will. 

SENATOR PETRIS: So, we don't have a list of 
recipients who are working. 

Well, this isn't the GAIN. This is over and above 
the GAIN. The GAIN program has been in place for some time, and 
there's a lot of different reactions to that. Some people are 
happy with it, and some people are very unhappy. I'm sure 
you've been told that. 

I guess we'll have to wait and see if the proposal's 
adopted, and see how it works. 

So, when you talk about providing a list of those 



26 

who've been receiving jobs, you're talking about GAIN. 

MS. ANDERSON: And some people who have gotten jobs 
on their own. And some people have gotten jobs as just a part 
of the effort that the counties are doing outside of GAIN. 
There's a lot of movement in the AFDC population towards work. 
Some of it is because they've gone to the GAIN program; some of 
it's because they've looked for it on their own. They don't 
want to be on AFDC; they want to work whenever they can. Some 
of it because the counties have provided some support to them. 
Some of it's because they've been on the JEPTA program through 
the PICs. There's a variety of ways that the people on AFDC go 
out and get work. 

SENATOR PETRIS: Do you have any kind of estimate of 
how many have left AFDC? 

MS. ANDERSON: How many have left AFDC? 

SENATOR PETRIS: Yes, or what percentage? 

MS. ANDERSON: Yes, we try — we try to keep some — 
as much data as we can on people, the turnover rate on AFDC. 

SENATOR PETRIS: But you don't have that with you? 

MS. ANDERSON: Not with me, I don't. 

SENATOR PETRIS: Mr. Healy, do you have it? 

MR. HEALY: Well, maybe not to the level that — that 
you're asking, but we — we realize about 17-20 percent of the 
individuals leave within, say, six months of coming on board; 50 
percent leave within 18-24 months of coming on board; and then 
roughly 50 percent are still on the system for 3, 4, 5 years 
out. 

Is that the kind of information you're asking for? 



27 

SENATOR PETRIS: Yes, that's the kind I'd like to get 
an update on. I've seen figures over a period of time. 

The kind you've just given me don't get very much 
attention. All I've been hearing is "three generations on 
welfare", and why we should get rid of it. Just the usual, the 
same, old mythology. 

And that's why I think you were asked in the 
beginning how many people come in from other states to get on 
welfare. 

MS. ANDERSON: Well, but see, there is a population 
on AFDC that is long-term and generational . That is not 
everybody on AFDC . 

You have a lot of women who come onto AFDC because 
they're in crisis. They just got a divorce; somebody got sick 
in their family, a variety of reasons for people to fall on 
AFDC. They come, and they get off pretty rapidly. 

But you've got another group of people on AFDC, about 
54 percent of the population, who come on as teen moms, and they 
stay. Their mothers were teen moms and on AFDC, and they're 
going to produce teen moms and be on AFDC. That population is 
long-term and generational. 

SENATOR PETRIS: That's 54 percent of what? Of your 
total roll? 

MS. ANDERSON: Of the AFDC population, about. 

SENATOR PETRIS: That's the first time I've heard 
that figure. Can you get me the — 

MS. ANDERSON: Yes. 

SENATOR PETRIS: — details on that? 



28 

MS. ANDERSON: Yes. 

And we have these two — two populations here. And 
what I think is very interesting is that single head of 
households, mothers who head households, 58 percent of them are 
not on AFDC. So you've only got 42 percent of this total 
population of single head of households who are on AFDC. 

And the way we do it, we treat these two populations 
very differently. And what usually — and what we see is that 
these 58 percent of these single moms work low paying jobs, some 
work two jobs, but they're not on AFDC. And they do all the 
expectations. They're really carrying it out. These women pay 
taxes, income taxes, and a lot of those women are the ones who 
are irate about AFDC, because they see women over here who are 
in the same circumstances they are in who are being treated 
totally different. Why? 

SENATOR PETRIS: They're not the ones that are 
talking to me, the ones that are irate that you mention. 
They ' re not the ones that are talking to me . 

MS. ANDERSON: Probably not the ones — 

SENATOR PETRIS: The ones talking to me are the 
average citizens out there and some business people who are sick 
and tired of having the "bulk", the majority of people on AFDC 
for three generations . 

MS. ANDERSON: Okay. 

SENATOR PETRIS: And that's what I describe as a 
mythology. 

MS. ANDERSON: You don't think that's true? 

SENATOR PETRIS: No. None of the reports up to now 



29 

— I invite you to give me any reports over the last 20 years 
from California that show that the bulk of people who go on the 
welfare program, including AFDC, stay there for three 
generations . 

All the reports I've seen talk about an average of 
less than two years, without exception, over the last several 
years . 

Now, all of a sudden, I'm hearing that 54 percent are 
on for three generations? 

MS. ANDERSON: No, no, no. I said 54 percent of them 
were teen parents. Those, that group of teen parents — 

SENATOR PETRIS: Oh, you're just talking about teen 
parents — 

MS. ANDERSON: But they come on as teen parents. 
They stay long-term. Usually their mom was a teen parent. 
Usually their mom was on AFDC . 

SENATOR PETRIS: What percentage of the total is 
that? 

MS. ANDERSON: Of the teen parents? 

SENATOR PETRIS: No, of the whole welfare population, 
AFDC population. 

MS. ANDERSON: Is the teen parent. They represent 54 
percent of the AFDC population who came on as teen parents and 
who are still on the grant. 

SENATOR PETRIS: And for how long is their average on 
welfare? 

MS. ANDERSON: It's a lot longer than the ones who 
come in with — who are married, and separated, and divorced. 



30 

SENATOR PETRIS: Can you give me an idea? Is it ten 
years, twenty years, two generations, three? 

MS. ANDERSON: We did a longitudinal study which we 
will share with you, and in that we showed that -- when we 
looked at the AFDC population, about half of them had been on 
over five years. 

SENATOR PETRIS: Over five years? 

MS. ANDERSON: Over five years, and that sort of — 
if we pull this other group aside and push them over here, this 
group over there is the long-term group. 

SENATOR PETRIS: And they're the teenagers? 

MS. ANDERSON: They're the ones who came on probably 
when they were very young, unmarried. 

You've got distinct populations in here, and I think 
what happens a lot is, we try to mix these populations up and 
make them one . 

You have women who come on AFDC, and families with 
husbands in them, who come on AFDC, and they really only need it 
temporarily. They use it as a temporary means, and they get on. 
They come on, and they stay a month. 

Well, a person who stays a month is going -- is going 
to make your statistics look different than the person -- as 
compared with the person who stays ten years. So, the month 
offsets the ten years, so you start to go down to an average. 

So, you have a lot of people who use this for what it 
was originally intended to, which was a temporary crisis 
program. 

SENATOR PETRIS: What percentage are the short-term 



31 

users? 

MS. ANDERSON: A little less than 50 percent of them. 

SENATOR PETRIS: Now, let me go back to the rates. 
Have you had an opportunity to study the rates and study 
conditions in our society to see how they match up? 

MS. ANDERSON: We've been looking at the projections 
of caseload, what's going on, trying to figure out what's 
happening. 

We don't quite know all the answers, but we're 
searching for what made the different between what's actually 
happening and what we had projected. We try to do that every 
time new information comes in, so we're constantly paying 
attention to this caseload. 

SENATOR PETRIS: How about the specific grant level? 

MS. ANDERSON: Well, we looked at how people — how 
much people pay for rent. 

SENATOR PETRIS: Yes. 

MS. ANDERSON: And I don't have the exact figures off 
of my head, and John may have them, but what we noticed is what 
people actually do in terms of renting is very different than 
what had been projected what they'd do for rent. So, their 
behavior out — there is a thing in California called fair 
market value for housing, and people were -- had been saying to 
the Department that what people were getting in terms of their 
grant was too low, and if they took the cuts it was too low; 
they weren't going to be able to find housing. 

When we looked at our study in terms of what people 
actually paid for rent, it was much lower than that. 



32 

So, yes, we do pay attention to what happens when we 
do anything in the program. We try to pay attention to what's 
the impact of that. 

SENATOR PETRIS: Is that across the board around the 
state, people paying lower than they anticipated? 

MS. ANDERSON: I believe yes. 

SENATOR PETRIS: You see, the last time I went into 
this at confirmation hearings, the answer was, "Well, they live 
with relatives," so they're really paying a lot less. 

Now you're telling me they're actually paying less. 
I'd invite you to check the metropolitan newspapers, classified 
ads for housing accommodations: Sacramento, San Francisco Bay, 
L.A., San Diego. See what kind of figures you see there for, 
you know, for a women with two children, an apartment. 

MR. HEALY: Senator, what we did do, we basically 
looked at the Census Bureau, the 1990 Census Bureau data and 
information, and we looked at the bottom quartile of rents being 
paid by community throughout the entire state. And part of it, 
the basis for the review was what Eloise was speaking to. 

Another part of it was to respond to the Legislature 
— and we're still doing that. We're still doing the staff 
analysis on it -- but respond to the Legislature's interest, 
expressed interest, in this past year of having a regional grant 
structure. And so, we are looking at, using the Census Bureau 
data, we're looking at the bottom quartile of rents paid for 
every community across the state to see whether or not there is 
any logical break, if you will, between them. 

I don't know how logical the break is, but it's a 



33 

fairly steady — steady incline, and you can probably guess the 
ones that are on the top. 

SENATOR PETRIS: Well, I'm looking at some figures 
here. The maximum aid payment for a family of three, 1988-89, 
actual grant $663; after six months it was the same. And it 
goes back to — that's the latest year — no, it doesn't. It 
goes up to '89-90, and down to '93-94 proposed. 

Now, this is the entire payment. 

MS. ANDERSON: But that's only the cash grant. 
Remember, a family gets AFDC. They get medical and they get 
food stamps . 

SENATOR PETRIS: They don't get clothing allowance. 
They don't buy shoes with that. 

And my suggestion to you is, if you check the rental 
ads either through a local broker in different communities or 
the classified ads, for a family of three, you're not going to 
find very many accommodations that only cost $600 a month for a 
family of three. That'll leave them $63 for all the rest of 
their needs that aren't covered by the food — 

MS. ANDERSON: But there are two things that we 
really are trying to do with this program. One is that we 
recognize that it takes two people to raise a child in a 
society. One is to get the mother into a position where she 
works, and to get the father in a position where he pays child 
support. Those two incomes combined should take the family out 
of poverty through this . 

This program, when it was designed in the 1930s, was 
not designed to be a long-term living arrangement for a family. 



34 

It was only meant to help them in a crisis. 

We've got to find some way to help these families, 
mom and dad, where ever they are, together or not, to be able to 
work together for their kids in a different way than looking at 
the state to try to pick up all this long-term. 

SENATOR PETRIS: Well, a lot of these families of 
three are a mom and two children, and dad isn't around. 

MS. ANDERSON: Yeah, but we've got a real effort in 
the Child Support side — 

SENATOR PETRIS: I'm aware of that. 

MS. ANDERSON: — trying to bring the fathers here. 

We know from a lot of data, not only in California 
but across the country, when dads put their part on the table, 
and moms work with this, that the family doesn't need AFDC any 
longer. 

SENATOR PETRIS: That's right, but that's not a very 
big number compared to the total. It's a worthwhile effort, I 
know. The state has even taken the lottery winnings from some 
lucky absentee father. I hope they keep on doing it. 

But I'm trying to look at the general experience of 
women who are single parent families with one child or two or 
three. Well, okay, this subject can go on. 

That's the extent of my questioning. 

Thank you, Mr. Chairman. 

CHAIRMAN ROBERTI: Thank you, Senator. 

Are there any other questions? 

Is there anyone in the audience who wishes to testify 
either in support? Okay, in support. Please come forward. 



35 

MS. CROSLEY: My name is Faye Crosley. I'm from 
Richmond, California, and I also am a mother. I also have a 
group home for children in Richmond. 

In answer to Senator Petris, there are a lot of jobs 
in Richmond. They're not that good a jobs. I mean, they're 
like first level. They're McDonald's, Wendy's, car washes, the 
group homes need help. We're always needing help, you know. 

We belong to an association that advocates for 
children, and that — 

SENATOR PETRIS: Excuse me. 

Are you saying you can support a family with two 
children on McDonald's wages? 

MS. CROSLEY: No, but what I'm saying — 

SENATOR PETRIS: Those are high school kids' jobs. 

MS. CROSLEY: What's I'm saying is, my daughter is 
not a high school — they got in a bad tight, and her husband is 
in the service, and she needed a job. And she supplemented 
their income by working at Burger King. 

SENATOR PETRIS: Okay, but she has a floor. She has 
a floor of a federal job. 

MS. CROSLEY: Okay, are you going to let me finish? 

SENATOR PETRIS: But the McDonald's pays minimum 
wage. 

MS. CROSLEY: I know, but sometimes you have to take 
those entry-level jobs, and then you have job stability. If you 
stay there a year -- and I've seen a lot of people do this — 
then you have something to take to — to tell the next employer, 
because they're not interested in hiring you if you don't have 



36 

experience. If you have shown you're punctual, and you're 
reliable, then you can move on, and you have to start. 

Now, I'll also say that there are a lot of jobs that 
may be second level. If you — clerical, receptionists, you 
know? I know there's been a lot of layoffs and things, but I 
know a lot of people around me in churches and in our 
organization and things, and they have taken this entry level. 

Now, I'm glad to know that there is going to be a 
change in that AFDC, because in some of the children that we 
have, and I know a lot of families that are five generation 
children, you know, five generation families that have been on 
AFDC, you know. They're all over San Francisco, and they don't 
have — haven't had any incentive to work, you know. And a lot 
of minds have been lost in the black community because they — 
if they work, if they do a few hours, then it's taken from them. 
Why work? 

But I'm glad to hear that there is something before 
the Floor that's going to allow them to work that won't penalize 
them, and then they can start using their minds, you know, for 
things that's going to really help — 

SENATOR PETRIS: Well, you know we had that in the 
past. We had the working poor. And they were able to keep 
their grant and earn up to a certain amount, until Ronald Reagan 
entered the White House, and he says, "Why are we paying people 
who are on welfare?" And he destroyed the program. It hasn't 
really been restored since. These are the first moves in that 
direction. 

In the meantime, as I told the new Director, there's 



37 

an awful lot of pain out there. 

MS. CROSLEY: Another thing, yeah, I remember, 
because I've been around since the '60s and, you know, '50s, 
too, coming up, and they used to help with baby sitters. I 
mean, there was all kinds of things that — that would help you. 

So, I'm hoping that, you know, there'll be a lot 
of change to — to help people, because there are a lot of 
people that really want to work, you know, and want to have a 
good life. 

Now also, I'd like to say, according to what you were 
saying about rentals. There's a lot of — I'm also in real 
estate, and there are a lot of Section 8 around. And people, 
like I work for Bartels, and they have a list. And usually on 
that list, it's a rental list, there are a lot of Section 8 
apartments. My own daughter just got in the city apartments. 
She's got a two bedroom apartment for $300 a month. 

So, and then there's also a program that will allow 
you to, you know, buy a home. You know, I mean, there's 
incentive, and where there's a will, there's a way, and with 
Legislators like we have now that's going to, you know, help 
these programs come along, I'm looking forward, you know, to a 
lot of improvement. 

I also would like to say that being in Richmond, 
discrimination was just rampant as a group home provider. I 
mean, I've operated a group home for three years and never got a 
child from my own county. Although, you know, the drug problem 
there is — is pretty bad. It wasn't until Ms. Anderson came in 
— I mean, it was just like there was no hope; it was pointless. 



38 

So many homes had to close up. 

And I will be writing you, you know, about our 
concerns and things. But it wasn't until Ms. Anderson was 
appointed, and all of a sudden, we got hearings. I mean, 
somebody wants to hear us, you know. That was really showing 
that there's some concerns now. We can voice — you know, we 
went to the hearings, and we were allowed to voice our concerns. 
That's a big step. Somebody is listening. That really meant a 
lot to the community that we could come and tell all of the 
things that had been going on. You know, whereas the black 
child had been used as a commodity only. 

So, you know, we're — I'm really happy to see the 
Governor showing some concern and putting people in. I mean, 
there's changes in Contra Costa County, as you're aware of. 
There's been transfers, and people that are listening to us and 
seem to care about us, and this is new. And, you know, we 
really appreciate it. 

CHAIRMAN ROBERTI: Thank you. 

Next. 

MR. SIMMONS: Thank you. I'm Al Simmons, speaking, 
representing the African-American Foster Care and Group Home 
Association. 

We are glad to see change. Change in Social Services 
is always welcome, because we seem to have had a continuing war 
going on between the black community, the black grandparents, 
the black foster care folk, and the group home people, primarily 
because we were not involved at the decision-making level of 
anything that had to do with the welfare of our kids. 



39 

It looks like now we're going to have a shot at it, 
you know, and except that we worry about how much time does it 
take for our bureaucracy to change, you see. 

Although we -- I think we're very supportive and 
expect great things from Eloise and John, we know we're going to 
have to do some pushing. 

In 1940, Franklin Roosevelt told us, "I'd like to do 
it, but I can't. Politically I can't. But if you go out there 
and make me do it, I will." That's when the first March on 
Washington in 1940 that you folks don't know about was 
cancelled, because Executive Order 8802 was reported at the 
NAACP meeting that he was going to issue it Monday morning, so 
the March on Washington was called off, and 8802 changed the 
military. Allowed me to go into the Navy, and people go into 
positions that they would not have done, an opportunity they 
would not have had, had that not happened. 

So, we're going to be pushing them, because we know 
nothing fundamental is changing unless we make it change. And 
as long as we have officials who are prepared for change, and 
when we ask for access to our kids, when our kids make up 75 
percent of the system, you see, we deserve that. We deserve 
some input. We deserve at least first crack at them before you 
send them to the — what we call the warehouse, and this kind of 
thing. 

So, I'm saying to, I guess, Eloise and John, we do 
expect to hold their heels to the fire. We do expect some 
change. We do expect our youngsters, black youngsters 
particularly, and brown youngsters, to have access to their own 



40 

people before they send them to strangers in far away places . 
And if we can — the sooner we can do that, the closer we can 
move toward improving the outlook for the black family, 
certainly in the State of California, and certainly in Alameda 
County, and all of the Northern California counties, because 
they're all experiencing these same things. 

I'm talking about grandparents having access their 
their grandkids . I mean, it's just a crime. In fact, I guess I 
got about a dozen grandmothers, you know. You think — I don't 
know, it's just unbelievable some of the things that we've 
allowed to happen to grandparents who traditionally, in minority 
families, support the total family, support the extended family. 
They are the backbone. 

So, I hope that when we begin leaning on them, and 
you, too, Nick, you know, we're going to get the kind of 
response that will not make us wait two years to see progress. 
We ought to be able to see it next week, the week after, and so 
on. 

Thank you very much. 

CHAIRMAN ROBERTI: Thank you very much. 

Anyone else in support? Please come forward. 

REV. MURPH: Senator Roberti and the other Committee 
Members, my name is Frederick 0. Murph. I'm the Senior Minister 
of the First African Methodist Episcopal Church in Oakland. 

Governor Wilson had called me some time ago when he 
was looking for a Director of the Department of Social Services 
for the State of California, wanting to know if I had a 
suggestion as to someone that could do a job and be sensitive to 



41 

all the constituents of the State of California. He looked high 
and low, and at one point in time, he even asked me if I was 
interested. 

I have a congregation of 1200 individuals, and that's 
headache enough, so therefore, I didn't take the suggestion. 

But I was very happy to find out that he had found a 
young woman, Eloise Anderson, brought her into the State of 
California. I was impressed with the fact that after she was 
appointed, two weeks later, she met with myself, along with 
other community leaders, to try to get a feel for what the 
concerns were in our community. 

One of the main beefs that most people have had about 
the State Department of Social Services is the fact it's been an 
invisible institution. People as if it doesn't exist in terms 
of addressing particular needs. 

And what I see today is, I see hope. As we think 
about South Los Angeles, as we think about the Rodney King 
verdict, we think about the various communities throughout this 
state, people are hurting. 

And I believe that Eloise Anderson represents hope. 
When people feel hopeless, you have a dangerous individual on 
your hands . 

So, we have to somehow or another bring about a sense 
of hope and help people to understand that Social Services 
aren't about a free handout. And I'm an African-American saying 
that. But it's about helping an individual over the hump. 
Helping them to become a productive member of society. 

And I support full heartedly the Governor's effort at 



42 

least to try to make an attempt to get people off AFDC, to get 
people to not become reliant upon a social system, and to use it 
as a temporary fix to help them become productive members of 
society. 

And I support wholeheartedly Eloise Anderson to be 
the Director of the Department of Social Services for the State 
of California. 

Thank you. 

CHAIRMAN ROBERTI: Thank you very much. 

MR. MSEMAJI: Mr. Chairman and Members, my name is 
Ken Msemaji from the United Domestic Workers of America. 

It's one of these opportunities where I am sincerely 
pleased to be here today to talk on behalf of both of these 
people. 

As you will recall, for some years now, a decade or 
so, I have been driving you crazy, you and your staffs, with 
coming, complaining about the State Department of Social 
Services did this and did that and did the other. 

Your earlier hearing with regard to the whole 
regulatory process, and how you'll pass legislation, and the 
regulations end up doing something else with it that you didn't 
have in mind. I can recall times when the bureaucracy not only 
went against the intent of the Legislature, but went against the 
intent of their own chief executive who had appointed them. 

So, I'm no fan of bureaucrats. However, I am very 
pleased to report that Eloise Anderson and John Healy, after all 
of these years, makes me believe that there is a little hope 
after all, because they are bureaucrats, but they are sensitive, 



43 

they are serious, and they have an inordinate amount of 
compassion that I've observed when they leave this Capitol and 
go out into various parts of the state to meet with people, to 
listen to them, to talk to recipients of services and providers 
and their families. 

Senator Roberti had asked early on about In-Home 
Supportive Services, which, as you know, that is all I do. And 
in that area, you all have been very good on a bipartisan level 
to protect it as much as you can over these last four or five 
drastic years. During these last couple of years, I'm glad 
we've had people like these two here to help facilitate between 
all of us and our concern when there's not enough money. 

I remember just before Governor Deukmejian left, some 
of the people in the Department were proposing to take all 
family members who were providing In-Home Supportive Services 
off altogether and not pay them, and they had a few other 
preposterous notions like that, unbeknownst to Governor 
Deukmejian. I remember that Senator Beverly, I think, was 
quoted in the paper as saying that he was ready to raise the 
issue of override if any of that kind of thing came to pass. 

Well, with these people, what we find is that they 
are hurting like I'm hurting, like you hurt everytime you deal 
with the budget questions. They are trying to figure ways to 
minimize the pain. They are trying to come up with new 
approaches that can allow us to hold on to what we've had until 
something else changes and gets better. 

I'm impressed also because they are extremely candid 
and truthful, which I haven't had the pleasure of meeting many 



44 

bureaucrats to do that, be straightforward and truthful, instead 
of playing games and out-slicking you. They will argue their 
points of view forthright, but when you argue back yours, they 
listen. Sometimes they change if you present a better argument. 
They're willing to experiment. 

They're willing to be flexible, but most of all, they 
are accessible. I catch them both there, 7:00 and 8:00 o'clock 
in the evening on many occasions. I catch them there early in 
the morning. We invite them to come meet IHSS recipients and 
their home attendant employees around the state, and they come. 

I think that under the circumstances that we face 
today, while we all don't agree with anybody else that we know, 
and I certainly don't agree with everything that the Department 
has to say, but I think that after having been here during 
Governor Brown, and Governor Deukmejian, and now this Governor, 
I hope we can hold on to these people for as long as possible. 
They have actually made a difference, and there is a marked 
change in the operation of that Department now than it was just 
a few years ago. They actually believe their job is to serve 
the public. They think the intent of the Legislature is 
important, and they want to follow that. All of these things I 
never saw in previous administrations. 

So, I urge with everything that I can for you to 
confirm them and to continue to work with them. Senator Petris, 
get them over there with those answers . They have a lot of good 
ideas that could help some of the things that you've been 
helping us with for years. 

Thank you very much for this opportunity. 



45 

CHAIRMAN ROBERTI: Thank you very much. 

Is there anyone in opposition? Oh, excuse me, I'm 
sorry. 

MS. DUFOUR: Thank you, Mr. Chairman, Members of the 
Committee. 

My name is Vivianne Dufour, and I am the President of 
the League of United Latin American Citizens, known as LULAC . 
I'm here to testify in favor of the confirmation of Ms. Anderson 
and Mr. John Healy, as the Chief — Director of the Department 
of Social Services and the Chief Deputy of the Department of 
Social Services. 

We feel that not only these two individuals are 
extremely well qualified, as you could hear from their 
testimony in terms of all the professional experience that they 
have had behind, but they're also very personable in terms of 
management style, and authentically very interested in the human 
being behind the system. 

Ms. Eloise Anderson has instituted an open-door 
policy and successfully has contributed to improve the 
communications among all the sectors involved in the Social 
Services field, and I am very encouraged to see that their style 
has carried the message of hope to those working in the 
Department as well as those associated with all the program of 
the Department . 

I believe that Ms. Anderson and Mr. Healy have 
demonstrated also enormous considerable courage by opening up 
the positions of the division chiefs within the Department of 
Social Services to all sectors with the intent of making it more 



46 

representative of the diversity of the population of California. 
As a result, Ms. Anderson has hired three Afro-Americans and two 
Hispanics to be part of the executive staff of the Department. 
This commitment to affirmative action and civil rights clearly 
has been demonstrated. 

Thank you. 

CHAIRMAN ROBERTI: Thank you very much. 

MR. WHITFIELD: Good afternoon, Senators. My name is 
Jacques Whitfield, and I am the Corporate Counsel for J.J. 
Friendship Homes, Incorporated, which is a Sacramento-based 
group home. I'm also one of the Corporate Counsel for AMARCH, 
which is the Association for Minority Adolescents in Residential 
Care Homes . 

We're here this afternoon very briefly to support the 
confirmation of Eloise Anderson. We applaud the Governor for 
finding someone who is an African-American female. Indeed, both 
of my clients are primarily concerned with the treatment of 
minority homes — minority health care providers, particularly 
in the group home industry. And we applaud the fact that 
someone has been appointed who is culturally sensitive to the 
needs of all the people, particularly my client base. 

We believe that California's strength is in its 
diversity, and we need people who recognize this fact and who 
will use that as a strength as opposed to a weakness. 

Everyone here has said a lot about hopes. I won't 
belabor that. 

I'm in the business of facts, and getting the best 
results for my clients. I believe that Hope is a little town in 



47 

Arkansas . 

So indeed, we want — it's my clients' position that 
we want results . We hope that this is more than a cosmetic 
change, that what's going on here is a fundamental change in the 
nature of DSS. And we hope that with these appointments and 
confirmations that we'll definitely see that. 

Thank you very much for your time. 

CHAIRMAN ROBERTI: Thank you very much. 

Anyone here in opposition? 

Do I hear a motion? 

SENATOR CRAVEN: Move Ms. Anderson. 

CHAIRMAN ROBERTI: Senator Craven moves Eloise 



Anderson. 



And do you also move John Healy? 

SENATOR CRAVEN: I will if I may. 

CHAIRMAN ROBERTI: Very good, so moved, both at the 



same time. 



SENATOR CRAVEN: Very well. 

CHAIRMAN ROBERTI: Director of the Department of 
Social Services, and John Healy, Chief Deputy Director, 
Department of Social Services. 

Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 

SENATOR PETRIS: Aye. 



48 

SECRETARY WEBB: Petris Aye. Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

The vote is five to nothing; confirmation is 
recommended to the Floor. 

Congratulations . 

MS. ANDERSON: Thank you. 

[Thereupon a brief recess was taken. ] 

CHAIRMAN ROBERTI: The Senate Rules Committee will 
come to order. 

We have now before us the appointment of Mr. John R. 
Banuelos, Director of the Department of Boating and Waterways. 

Senator Pat Johnston is here to introduce him. 

SENATOR JOHNSTON: Thank you, Mr. Chairman and 
Members . 

John Banuelos has been a friend of mine for a dozen 
years. I got to know him first when he served as the Director 
of the California Conservation Corps program that is located in 
Stockton at the Stockton Developmental Center, the Delta 
Program. 

Over the years, as you'll note, John came from being 
a police officer, to work with the CCC, and moved up rapidly 
through the ranks. And his skill as a person of organization, 
dedication, and integrity, and service to the people of the 
State of California has a long and distinguished history. 

I just plain like him a lot, and I recommend him to 
you. 



49 

CHAIRMAN ROBERTI: Thank you very much, Senator. 

I heard Mr. Banuelos ' s oration at Assemblyman 
Collins' s Memorial, and needless to say — I mean, I hate to say 
the word, but we enjoyed it. I mean, it was a beautiful 
tribute, and I just thought I would mention that. 

MR. BANUELOS: Thank you, sir. 

CHAIRMAN ROBERTI: It says something about you, too. 

SENATOR JOHNSTON: One final word. 

I'd say that the Department of Boating and Waterways 
has, from time to time, been under attack. I think it's a small 
but important agency that is lean and capable of performing 
services to the public and recreational boaters and marina 
owners in California, and is worth keeping, but it will only 
prove its worth with strong leadership. It's had that sometimes 
in the past, not always. It does now. 

I represent a large portion of the Delta, so I'm 
familiar with that agency's work, and it is good. And under 
John's leadership, getting better. So, I commend him to you. 

CHAIRMAN ROBERTI: Thank you, Senator. 

Mr. Banuelos, we'll ask you why you feel you're 
qualified to assume this position? 

MR. BANUELOS: Thank you, sir. 

Mr. Chairman and Members, good evening. I will cover 
briefly my background in state government and public service. 
Prior to that, I'd like to make a statement. 

I was born and raised in San Diego, California. 
Married with two children, and I'd like that — and I'd also 
like you all to know that both of my children, my son and my 



50 

daughter, are both graduates of colleges: one Davis and the 
other San Diego. And my daughter will be a teacher in two 
months, and I'm very proud of that. 

What makes me qualified as Director of the Department 
of Boating and Waterways . It would be my administrative and 
management experience . 

After I served in the U.S. Army from 1965 to 1968, I 
worked for the City of San Diego, for the County, as a lead 
person for the Public Works Department, and than as a San Diego 
police officer. 

Following that, I was hired by the State of 
California and by the California Conservation Corps. I was a 
Project Coordinator for a short time, a period of four months, 
then for six months I was reassigned as the CCC Training Academy 
Director up in San Luis Obispo, California. I directed 
approximately 45 civil service staff at that time, about 380-400 
Corps members. I directed, planned, organized, all aspects of 
the training at the Academy, set policy, procedure and programs. 

In May of 1978, I was appointed Center Director of 
the CCC Center in Camarillo, California, a little over a year. 
I managed and directed all Center operations for 20 staff and 80 
Corps members, with a 24-hour live-in residential facility. 

From June of 1979 to October of 1981, I was promoted 
by Mr. B.T. Collins, the Director, as Regional Deputy for both 
Region 1 and Region 2 as we were opening up centers throughout 
the state. At that time, I directed 125 civil servants and 
personnel or Corps members to the number of about 600. I opened 
up 12 new centers within the CCC throughout the State of 



51 

California at that time. 

From November of 19 81 to February of 1984, I was 
selected by Jack Dugan at the time as Deputy Director, an exempt 
position of Field Operations for the California Conservation 
Corps. This included under my umbrella 325 civil servants and 
over 1800 Corps members. There were 25 CCC centers throughout 
the state at that time. I also had the help of three regional 
deputies with their assistance under my umbrella. 

From February, 1983 to December of 1982 [sic], I was 
the District Director for the Sacramento-San Joaquin Center 
located in Stockton, California. At that time I had 25 staff 
and a total of 155 Corps members. 

So, I guess when you ask what makes me qualified, I 
would say that my administrative and my management background. 
Other qualifications that I feel that I have, I feel that I have 
leadership ability. I lead by example. And I learn by doing 
and working with the civil servants. 

I have a lot of common sense, I feel, and I make 
decisions, and I'm responsible for the decisions of the 
Department. I surround myself with good, qualified staff. 

People have asked me in the past why such a change 
from Boating — or, CCC to Boating and Waterways? About 14 
years ago, I came to Sacramento, and at that time I listened to 
a lady talk at a conference. Her name was Marty Mercado. And 
at that time, I was very impressed with her, and I just didn't 
pick the Department because it was a small department, or it 
dealt with boating and waterways or recreational boating. I 
felt like she was a role model to me, and luckily I was chosen 



52 

as Director of the Department in December. 

I have a lot of experience in working with a lot of 
different entities, like CDF, DWR, other agencies within the 
Resource Agency, or other departments within the Resource 
Agency, excuse me. 

I have a real deep appreciation and respect for the 
civil service personnel in the state, because I was a civil 
servant for over 20 years and consider myself still to be a 
civil servant. 

I'm a good motivator of staff, and I inspire them to 
do their best. And morale within the Department, or any 
department, is real important to me. 

I know the civil service system because I've been in 
it for 20 years. I feel that I'm a hard worker, a problem 
solver, and a believer in quality in government. 

I take full responsibility for the Department while 
it's under my watch. I take this position very seriously as 
Director and want the people of the state to know that I am a 
custodian for the Department, and they can rest assured that any 
action that I take will be one that I feel serves the best 
interests of the State of California. And also, the Department 
is a friendly department, or a user-friendly department. 

I've only been with the Department a little over 
three months. And in that time, I have been impressed with the 
staff and the Department's reputation throughout the state. I 
intend to continue to live up to the reputation that the 
Department has . 

These are some of the reasons and qualifications I 



53 

feel that I bring to the Department. I feel that I'm — I'm 
trying to be creative within the Department. It's a small 
department. There's only 65 budgeted positions, and I'm only 
working with 50 positions right now, and I have no intention to 
fill all the positions at the Department because of the budget 
cuts . 

So, I feel that total quality management, or that's 
what we're leading to in the State of California, is real 
important to me, because I think that if I can inspire and get 
the staff to do more than one job, that's a goal of mine, and 
that they have to serve not only one purpose at that Department, 
but maybe a couple of services in that Department. 

That's why I feel I'm qualified for this position. 

CHAIRMAN ROBERTI: Thank you, Mr. Banuelos. 

Are there any questions? 

Is there anyone here in opposition? 

I think you're going to get off easy. 

Do I hear a motion? 

SENATOR BEVERLY: Move we recommend confirmation. 

CHAIRMAN ROBERTI : Senator Beverly moves the 
confirmation be recommended to the Floor. 

Any discussion on the motion? Secretary will call 



the roll. 



SECRETARY WEBB: Senator Ayala. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 



54 



Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 
SECRETARY WEBB: Roberti Aye. 
SENATOR BEVERLY: May we keep the roll open? 
CHAIRMAN ROBERTI: We'll keep the roll open for 
Senator Ayala, but there are three votes. 
Congratulations . 

MR. BANUELOS: Thank you very much. 
SENATOR BEVERLY: Move the call be lifted. 
CHAIRMAN ROBERTI: Senator Beverly moves that the 
call be lifted. 

Secretary will call the roll on Banuelos. 
SECRETARY WEBB: Senator Ayala. 
SENATOR AYALA: Aye. 
SECRETARY WEBB: Ayala Aye. 

CHAIRMAN ROBERTI: The vote is four to nothing; 
confirmation's recommended to the Floor. 

[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
5:15 P.M. ] 

— 00O00 — 



CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand 

// # 

this /(^ day of April, 1993. 




:zak 

Shorthand Iteporte'f 



224-R 

Additional copies of this publication may be purchased for $5.00 per copy 
plus current California sales tax. 

Senate Publications 

11 00 J Street, Room B-15 

Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Senate Publication Number 224-R when ordering. 






L 



/ 



I 



HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, APRIL 28, 1993 
2:04 P.M. 



DOCUMENTS DEPT. 

MAY 2 1993 

SAN FRANCISCO 
PUBLIC LIBRARY 



225-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, APRIL 28, 1993 
2:04 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR DAVID ROBERTI, Chair 

SENATOR WILLIAM CRAVEN, Vice Chair 

SENATOR RUBEN AYALA 

SENATOR ROBERT BEVERLY 

SENATOR NICHOLAS PETRI S 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

GERALDO FELANDO , D . D . S . , Member 
Youthful Offender Board 

LINDA ANN FRICK, Member 
Agricultural Labor Relations Board 



Ill 

INDEX 

Paae 

Proceedings 1 

Governor ' s Appointees : 

GERALD FELANDO , D . D . S . , Member 

Youthful Offender Parole Board 1 

Background and Experience .... 1 

Motion to Confirm 2 

Questions by SENATOR AYALA re: 

Parole Violators 2 

Suggestions to Reduce Recidivism 2 

Discretion of Judge to Try Individual 

as Adult or Juvenile 4 

Budgetary Constraints to Programming 4 

Questions by SENATOR PETRIS re: 

Suggestions for Improvement of System 5 

Prevention 6 

Committee Action 7 

LINDA ANN FRICK, Member 

Agricultural Labor Relations Board 8 

Background and Experience 8 

Questions by SENATOR AYALA re: 

Delays in County Election Ballots 10 

Request for Data on Average Time for 

Election Results 11 

Motion to Confirm 11 

Committee Action 12 

Termination of Proceedings 12 

Certificate of Reporter 13 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN ROBERTI: Governor's appointees, Gerald 
Felando, Member of the Youthful Offender Board. Please come 
forward, Assemblyman. 

We'll ask you what we ask all the Governor's 
appointees, why you feel you're qualified to assume this 
position, even though we know you. 

DR. FELANDO: I'm sorry? 

CHAIRMAN ROBERTI: Why you feel you're qualified to 
assume this position, even though we know you. 

DR. FELANDO: Probably a very, very good question. 

I think that my years in the Legislature prepared me 
for this job more than anything, especially dealing with the 
issues, the very issues, that I'm sitting now implementing with 
the youthful offenders. 

CHAIRMAN ROBERTI: Are there any questions of 
Dr. Felando? 

Well, I think this is a good appointment, and we're 
glad to see — 

DR. FELANDO: Thank you, Senator. 

CHAIRMAN ROBERTI: — that the Governor appointed 
you, and I think you'll do a good job, and you have a good 
history of working with everyone in the Legislature to solve 
problems . 

Senator Beverly. 

SENATOR BEVERLY: We're going to make it this easy? 

CHAIRMAN ROBERTI: You're his Senator. It's your job 



to make it hard. 

SENATOR BEVERLY: Not withstanding a possible 
conflict, I'm pleased and happy to recommend him for 
confirmation. 

CHAIRMAN ROBERTI: Senator Beverly moves. 

Is there any opposition in the audience? 

SENATOR AYALA: Can I ask him a question? 

CHAIRMAN ROBERTI: Senator Ayala. 

SENATOR AYALA: Mr. Felando, what percentage of 
incarcerated wards are parole violators? Do you know that? 

DR. FELANDO: We have — 

SENATOR AYALA: I have a Youth Authority in my 
district, and I visit it, and it's always, you know, breaking at 
the seams . 

How many of those people are there — 

DR. FELANDO: Well, I think recidivism is — is 
somewhere between 50 and 70%, depending on where they're located 
and what you're counting. So, 50%. 

SENATOR AYALA: Fifty percent? 

DR. FELANDO: Yes. 

SENATOR AYALA: What do you attribute that to? What 
can we do at the Authority level to try to lower that number? 

DR. FELANDO: You know, I'll answer that, and I think 
that all you Senators, you've known me for a long enough time 
that I'm going to give you the straight shot as I see it. It 
may not be accurate, but as I see it. 

Quite frankly, we need more programming with the 
wards that — that we are dealing with and that we are paroling. 



Many times, we run out of commitment time, and we don't have a 
choice but to parole them. That doesn't necessarily mean that 
they're ready. Because of lack of funds, the ward did not see 
— receive the proper programming while he was with us. 

SENATOR AYALA: You have a lot of vocational 
programs . 

DR. FELANDO: Not enough, Senator. 

SENATOR AYALA: Not enough? 

DR. FELANDO: No. We're sending people out there 
that are not qualified to have jobs. Some of them can't read or 
write, but it's the same story, and we need some money to 
correct that. 

I would be more than happy to at some time sit down 
with you personally and really go through it, because I do have 
some ideas . Having only been there four months , I have a 
picture of — of what's going on and what we need. 

SENATOR AYALA: They at one time had what they called 
midway or homes for these people, Youth Authority in my area, 
and so they put them in these motels with a swimming pool, and 
all these good things, big t.v. screens. 

Well, this is not the real world, you know. And they 
came from an environment that was nothing like that. I just 
wonder if that was a good program to put them in that kind of an 
environment, and then, when they get discharged, they go back to 
whatever they came from. So, I don't know what that 
accomplished at all. It was just before they got discharged, 
they put them in there for a period of time. 

DR. FELANDO: I would much rather see that kind of 



money put into programs so that when we do parole a ward, he's 
able to go — he or she is able to go out and get a job and 
become a contributing member to society. And oftentimes, we're 
not doing that. 

SENATOR AYALA: You know, I introduced a bill ten 
years ago that allows the judge on a juvenile offender, if they 
committed a real serious crime, that the judge, with input from 
the Probation Department and, I think, the District Attorney's 
Office, would make a ruling whether this individual would be 
tried as an adult or as a juvenile, if he was 15 or 16 years 
old, whatever it was. 

Is that working as far as you're aware, give the 
judge the discretion to determine whether — 

DR. FELANDO: The judge in many cases has that kind 
of discretion as to whether they're going to be tried as a 
juvenile or an adult. 

I think in many cases, we're trying — we're trying 
these individuals as juveniles and they should be tried as 
adults and go to the CDC rather than the Youth Authority. 

The nature of — of the crime, committing offenses, 
has changed dramatically in the last ten years. And I think 
that we ought to go back and take a look at what we're dealing 
with. The violent crime has increase ten-fold, but we haven't 
addressed that. The Legislature has not addressed that. 

SENATOR AYALA: Over population has an effect on the 
programs that you have for them . There ' s not enough money to 
take care of all these — 

DR. FELANDO: That's right, and I'm not saying 



incarcerate them. I'm saying program them. 

I think, you know, we need those programs out there 
to help these individuals . 

SENATOR AYALA: They can be very useful, because they 
go out into the community and do a lot of work, sometimes, with 
the people who are not one of those rough characters, and they 
do a lot of good work. At one time, they built a home, put it 
on skids and sold it. That was one of their programs. 

And then they've got welding, and metal shop, shoe 
repairing — 

DR. FELANDO: We still have those programs, we just 
need more, because we've got more wards to deal with. 

SENATOR AYALA: Thank you. 

CHAIRMAN ROBERTI: Any further questions? Senator 
Petris. 

SENATOR PETRIS: I realize you've only been there a 
short time, but if I were to ask you as a former Legislator who 
deals with problem solving, have you been there long enough to 
be able to tell us what ought to be done to improve the 
situation there, whether it's the Board, or the personnel, or 
the budget, or anything about it do you feel already at this 
early date really cries out for improvement? 

DR. FELANDO: Yes, I can address that. 

And I would think that the number one issue, if I 
could do it, you know, just wave a magic wand, would be to make 
all the programs that are available uniform throughout the 
system. We have — we have issues now where we know what a ward 
needs, but then we have a problem finding an institution for him 



that doesn't have a waiting list that's so long that the ward 
will never get the program that he needs. 

I would make those programs uniform throughout the 
system so that each institution would have that program. 

Then I would go back, and I would emphasize education 
and vocational training with — and I know you're all going to, 
maybe, chuckle a little bit — with tremendous emphasis on self- 
esteem, which I find lacking in the Y.A. right now. They really 
don't teach these wards self-esteem, and I can't emphasize that 
strongly enough. 

I think that — but then, see, Senator, we're talking 
about money. And we come in with our budget, and Y.A. comes in 
with their budget, and the first thing that the hearing chairman 
says to us is, "Well, show us where we can cut 15% from your 
budget . " 

Well, I don't know that you can do that with the 
youth of the State of California any longer. If you're going to 
turn these wards out without the proper programming, they're 
destined to failure. And what you're doing is creating a 
revolving door. We're letting them out because of time 
constraints and bed space, and they just do a circle and come 
back in the other end on a new offense. 

SENATOR PETRIS: What about prevention before they 
ever get into that situation? 

DR. FELANDO: By the time they get to Y.A., they've 
had numerous — and I'm talking maybe five, six, seven, eight 
different chances and eight different programs in the various 
counties. Granted, some of the counties don't have the programs 



that L.A. County has, for instance, but I would, yeah, I'd place 
more emphasis on prevention, you bet. 

SENATOR PETRIS: Would that be in the public schools? 
Where do we try to mold the youngsters to be more productive? 

DR. FELANDO: How about some outreach programs for 
the parents as soon as the kids start going bad? 

SENATOR PETRIS: Some what? 

DR. FELANDO: Outreach programs for the parents. A 
lot of — a lot of times, the wards are there because the 
parents didn't care enough, or didn't know what they were 
supposed to do. 

SENATOR PETRIS: Or often don't even know what the 
kids are doing. 

DR. FELANDO: Correct. 

SENATOR PETRIS: Okay, thank you. 

CHAIRMAN ROBERTI: Any further questions? 

Secretary, call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

The vote is five to nothing; confirmation is 



8 

recommended to the Floor. 

Congratulations . 

DR. FELANDO: Thank you. 

CHAIRMAN ROBERTI: Linda Ann Frick, Member of the 
Agricultural Labor Relations Board. 

MS. FRICK: Hello. 

CHAIRMAN ROBERTI: Ms. Frick, we'll ask you the same 
question: why do you feel you're qualified to assume this 
position on the ALRB? 

MS. FRICK: Thank you, Mr. Chairman and Senators. 

I know you don't know me like you know Mr. Felando. 
My background is in law. I've been practicing for 20 years, for 
ten years in private practice, and I've been in government for 
approximately ten years . 

SENATOR CRAVEN: Linda, put that mike a little closer 
to you, please. 

MS. FRICK: I'll start from scratch. 

My background is in law. I've been practicing for 20 
years. I've represented clients, argued on their behalf. I 
have had opportunities to sit in positions where I've had to 
listen to adversaries disagree and then make a decision. I've 
also had opportunities to render advice to lots of clients. 

I guess in particular, for ten years I had a private 
practice in Bakers field. During that time it was a typical 
private practice in the '70s. I did defense criminal work, both 
adult and juvenile. I did lots of plaintiff civil work in the 
typical things such as divorces and bankruptcies. I appeared in 
a lot of different administration forums as well as in state 



courts . 

During that time, I also volunteered a lot, and I had 
a couple of different positions I'll mention. One was, I was a 
Kern County Civil Service Commissioner for about four years. 
And during that time not only did we work with the union and the 
County to help resolve routine issues, but the Commission had 
not yet delegated its responsibility of conducting hearings to 
an ALJ, and so, the Commission itself conducted the hearings. 
For the year I was Chair, I was responsible for conducting the 
hearings as well as the meetings. 

I also served on the board for several years of the 
Greater Bakers field Legal Assistance. 

For the last ten years, I've been with the 
government. In the different positions I've had, I've learned 
an awful lot about state operations. I've learned about some 
very specific subject matters that I can get into, but they're 
in my resume, and if you have any questions, I can go into them. 

For the last eight months, as you know, I've been 
with the Agricultural Labor Relations Board. Even after 17 
years, that Board is still being presented with very significant 
and novel issues. When I was appointed, I was appointed as 
the third member, and three members are required to do any 
business at all. And so, I've been involved with all of the 
decisions for the last eight months, whether they were decisions 
or administrative orders, the litigation that's been ongoing. 
And I basically had to hit the ground running, because there was 
no chance to just be broken in to it. 

I think I've been learning the law as the issues have 



10 

come up. I certainly am familiar with how to do some of my own 
research. 

From the time I've been there during the last eight 
months, it appears that the role of a Board member is to present 
a forum to all of the parties where they can come, present their 
point of view on the evidence and the law, and be heard. Then 
it's up to me to make a decision and to render a fair and 
impartial one for the people of the State of California. 

I just — I feel that the breadth of the experience 
I've had, the different procedural forums I've worked in, the 
number of clients that I've represented, has enabled me to be 
able to do this job in a very adequate way, so I would ask for 
your support. 

CHAIRMAN ROBERTI: Thank you. 

Are there any questions? Senator Ayala. 

SENATOR AYALA: Ms. Frick, in terms of the delays in 
counting ballots, I understand that's quite a prolonged project. 

Why does it take so long, and what are we doing to 
expedite the returns as quickly as possible on elections? 

MS. FRICK: I don't oversee that directly, but since 
I have been there, we've been kept informed of when the 
petitions are filed for elections and when the elections occur. 
And it appears at this point that any — the elections — the 
ballots have been counted promptly, that we are being advised of 
the tallies almost immediately. And except for possible delays 
because regional directors just simply do not have the time in 
light of their other responsibilities to get to it, the 
challenge ballot reports are coming out timely, if there are 



11 

challenge ballot reports. Otherwise, they are being counted 
timely. 

And I will check when I go back and determine that. 

SENATOR AYALA: What is the average time? Are you 
aware of what is the average time it takes to announce the 
results after the election's held? Do you have any information 
like that? 

MS. FRICK: No, I don't, actually. 

SENATOR AYALA: Would you get it? 

MS. FRICK: I was under the impression it was almost 
immediate, and I'm going to go back and find out. 

SENATOR AYALA: I've been told it takes quite a 
while, and I don't understand the delays. 

MS. FRICK: I actually don't either. I appreciate 
that. 

CHAIRMAN ROBERTI: Any other questions? 

Is there any opposition in the audience? 

SENATOR CRAVEN: Move Ms. Frick. 

CHAIRMAN ROBERTI : Senator Craven moves Ms . Frick ' s 
confirmation be recommended to the Floor. 

Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 



12 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 
CHAIRMAN ROBERTI: Aye. 

The vote is five to zero; confirmation's recommended 
to the Floor. 

Congratulations . 

MS. FRICK: Thank you very much, Senators. 

[Thereupon this portion of the 

Senate Rules Committee hearing 

was terminated at approximately 

2:24 P.M. ] 

— 00O00 — 



13 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand 
this c-^/ day of April, 1993. 




MJ^ZAK 
Shorthand Reporter 



i^^ 



225-R 

Additional copies of this publication may be purchased for $4.00 per copy 
plus 7.75% California sales tax. 

Senate Publications 
1100 J Street, Room B-15 
Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Senate Publication Number 225-R when ordering. 






HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 5, 1993 
2:12 P.M. 



DOCUMENTS DEPT. 

MAY 2 1993 

SAN FRAJ'JG'.SCO 
PUBLIC LIBRARY 



226-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 5, 1993 
2:12 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 
MEMBERS PRESENT 
SENATOR DAVID ROBERTI , Chair 
SENATOR WILLIAM CRAVEN, Vice Chair 
SENATOR RUBEN AYALA 
SENATOR ROBERT BEVERLY 
SENATOR NICHOLAS PETRIS 

STAFF PRESENT 
CLIFF BERG, Executive Officer 
PAT WEBB, Committee Secretary 
RICK ROLLENS, Consultant on Bill Referrals 
NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

KAREN L. McELLIOTT, Member 
Medical Board of California 
Division of Medical Quality 

LAWRENCE D. DORR, M.D., Member 
Medical Board of California 
Division of Medical Quality 



Ill 

INDEX 

Page 
Proceedings 1 

Governor's Appointees (Appearing Together): 



KAREN McELLIOTT, Member 
Medical Board of California 
Division of Medical Quality 

Background and Experience 1 

LAWRENCE D. DORR, M.D., Member 
Medical Board of California 
Division of Medical Quality 

Background and Experience 3 

Questions by CHAIRMAN ROBERTI re: 

Case Dumping, Reasons for It and Plans 

to Deal with It 5 

Response by DR. DORR 5 

Response by MS. McELLIOTT 6 

Number of Pending Disciplinary Cases 6 

Question of DR. DORR by SENATOR CRAVEN: 

Stader Splint 8 

Motion to Confirm Both Appointees 9 

Committee Action 10 

Termination of Proceedings 10 

Certificate of Reporter 11 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00-- 

CHAIRMAN ROBERTI : Now we have Governor ' s appointees 
appearing today. I think we can bring them up at the same time. 
Lawrence D. Dorr, Member of the Medical Board of California, 
Division of Medical Quality, and Karen L. McElliott, Member of 
the Medical Board of California, Division of Medical Quality. 

Why don't you both come forward, and we will ask you 
both what we ask all Governor's appointees, why you feel you're 
qualified to assume these positions. 

Whichever one of you wants to go first gets to go 
first. 

MS. McELLIOTT: Well, I have a statement to make. 

CHAIRMAN ROBERTI: Very good. 

MS. McELLIOTT: I will read it to you. I'm not as 
extemporaneous, I think, as Dr. Dorr, so if you'll bear with me 
while I read my comments . 

First of all, I want to thank you, honorable 
Chairman and distinguished Senators, for the opportunity to be 
here. And I first of all would like to take this occasion to 
thank Senator Roberti and his staff for selecting me in 1987 to 
fill the public member vacancy to the State Board of Podiatric 
Medicine . 

CHAIRMAN ROBERTI: Very good. 

MS. McELLIOTT: From that experience, I realized the 
value of these boards to the consumers. 

During my tenure, the Podiatry Board made some 
incredible strides towards protecting the consumer, establishing 



a more efficient response time to consumer complaints. It was 
also this board which initiated and persevered in concert with 
the Medical Board's staff to create an effective quality control 
matrix for the Medical Board and the Divisions of Allied Health. 
This has become an invaluable tool to track the process of 
consumer complaints. 

I also had the honor to be the first president and 
the first public member to be president of the Board of 
Podiatric Medicine as it is structured today. 

The experience acquired from my years on these 
medical-related boards — on this medical-related board has 
proven to be significant during my brief few months on the 
Division of Medical Quality. I am proud to have the opportunity 
to be among the select few that can be a part of the government 
system that is dedicated to fulfilling the mission established 
by the Department of Consumer Affairs and the Medical Board, and 
that is protect the consumer through the proper use of licensing 
and enforcement that is delegated to us by the State 
Legislature. 

The Medical Board is under some extraordinary 
scrutiny at the present time, but we are making great strides in 
re-evaluating our past performance, and we as a board are 
determined to provide quality medical care and efficient, 
expeditious enforcement for all Californians . The successful 
Medical Board Summit held in March was an illustration of the 
board's commitment to the Legislature and the consumers to be 
the best we can possibly be. 

My role as a member on the Medical Board, and 



specifically on the Division of Medical Quality, is to 
discipline medical doctors who practice below the standard of 
care, set general policy, and oversee the enforcement of — and 
oversee the enforcement program. An awesome responsibility, a 
challenge I accept without hesitation or bias. 

It is with pride that I sit before you today, and it 
would be an honor to continue to serve the public as a member of 
the Medical Board of the State of California. 

CHAIRMAN ROBERTI: Thank you, Ms. McElliott. 

Dr. Dorr. 

DR. DORR: Thank you. 

Again, honored Chairman and distinguished Senators, 
it certainly is my pleasure to be here today. 

I feel that I'm qualified for this position because 
of the experience and the knowledge that I have in the medical 
field. I'm an orthopedic surgeon. I have through the years 
been involved in all aspects of medicine, which I believe has 
increased my ability to serve the State of California well. 

On a local level, I have been in private practice in 
Los Angeles with the Kerlan-Jobe Clinic, which is -- has some 
renown as a sports clinic. I presently am at USC, where I'm 
established in our Arthritis Clinic. I subspecialize in the 
area of arthritis surgery, and I do only total joint 
replacement, and I've had the distinct honor of being able to 
design a total hip replacement and a total knee replacement 
that's used for patients across the country, so I understand 
some of the business aspects of medicine from that. 

I teach at USC, so I understand some of the academic 



aspects of medicine because of that. 

I'm the founding editor of the Techniques of 
Orthopedics Journal , and I'm a founding editor of the Journal of 



Arthroplasty , so that I'm distinctly involved in the education 



of orthopedics. I was a founding member of the Knee Society and 
President of the Knee Society for the United States, and I was 
one of the founding members and the first chairman of the 
Government Relations Committee for the Association of Arthritis 
Hip and Knee Surgeons, so that I have had some experience 
working in these medical problems and working with government 
agencies. And I will be President of the Association of Hip and 
Knee Surgeons in two years . 

Because of my experience in all these different 
aspects of medicine, I believe I understand a good deal about 
what the problems are at this time in health care. I believe I 
understand what a lot of the problems are at this time in regard 
to the conflicts between the consumer and the doctor, and I 
believe that I have some good ideas in ways that we can improve 
on those. And I believe that with the Medical Board being in 
the turmoil that it has had simply because of a lot of the press 
that it's had over the past few months, that it's an ideal time 
for participation in this board and the ability to direct the 
medical care for the consumers of California in a direction in 
which it becomes the best in the nation. 

And I'm focused on that particular aspect of service, 
and I must say that it's an absolute thrill for me, with all the 
recognition that I have been lucky enough to achieve in 
medicine, to have the opportunity to serve my state on this 



board, and I appreciate the opportunity for your consideration. 

Thank you. 

CHAIRMAN ROBERTI: Thank you very much, Doctor. 

One of the big issues that the press has covered 
quite extensively has been the issue of case dumping. I guess 
that ' s the — 

DR. DORR: That's what it's been called. 

CHAIRMAN ROBERTI: — designation for it, right. 

So, what specific plans do either of you have to deal 
with it, and what have been the reasons for it? Is it just too 
much work for the board, or a lack of proper management of these 
kinds of cases, or not enough jurisdiction, or slovenliness? 
What ' s been the reason? 

DR. DORR: Well, Chairman, I think that the CHP 
Report has obviously — has been made available, and I think 
there were a lot of aspects of that report that were taken out 
of context. And I'm not sitting here and saying that the 
Medical Board did everything right and the Report's wrong, but a 
lot of that was taken out of context. There were cases that 
were inappropriately handled. Those are being re-reviewed at 
this time. 

Because of that Report, and because of some of the 
direction, I think, that has been — that has occurred through 
the Department of Consumer Affairs, the Medical Summit was held, 
as Karen mentioned, about a month ago. And I think there was a 
lot of good, influential work done at that Summit. 

But I think that — and at that Summit, by the way, 
assuming that my appointment is confirmed, I was — I was 



appointed as the chair for the Committee for the Task Force to 
study the enforcement process and to try and detail that in a 
more efficient and in a more aggressive manner so that we don't 
have the same problems about which you speak, and that people 
who are accused are able to have their — the adjudication of 
their case done quickly and efficiently and in a fair manner. 
And that will happen, I can assure you, because I always have 
been in a situation where I can make decisions, and I enjoy 
responsibility, and I'm not adverse to making hard decisions to 
make change, and there will be change made along that line. 

So, I think that if you give us a little bit of time, 
since we're rookies, if you let us get into the ball game, we 
can play it. 

CHAIRMAN ROBERTI: Thank you. 

How about you, Ms. McElliott? 

MS. McELLIOTT: I agree. I mirror the comments of 
Dr. Dorr. 

I think our biggest concern is to make sure that we 
regain the confidence of the public in the Medical Board, and I 
am also going to be a part of that Task Force that Dr. Dorr is 
chairing, and I look forward to seeing us move -- move forward. 

CHAIRMAN ROBERTI: About how many disciplinary cases, 
roughly, are pending right now? 

DR. DORR: That are pending at what level? There's 
two different levels. 

You see, there's the cases that are in front of the 
administrative law judge, and that's one level of cases. And 
those have already been determined that they should be 



prosecuted. There's a separate set of cases below that level; 
they're in the investigative phase. Those cases are — a 
decision will be made as to whether or not they are going to be 
sent on to the ALJ. 

The average number of cases the last two years has 
been in the range of 900. The average number per year — 

CHAIRMAN ROBERTI: Nine hundred per year? 

DR. DORR: Yes. The average number, I think, or the 
number, I think, that was — or close to the number that the ALJ 
had to handle last year was like 128, in that area. So, there's 
difference cases at different levels. 

What we need to do is not necessarily that we can 
speed up the ALJ cases, because once they get into the court, 
they're in the court, and the lawyers and the judges are going 
to determine the rate at which that prosecution occurs. 

But we need to speed up the complaint process and 
make the complaint process easier for the consumer, make the 
complaint process more efficient once it's occurred so that we 
can determine if it's a truly valid complaint, and if so, that 
it's moved on into the investigative stage. And when it's in 
the investigative stage, we need to be able to, at that point in 
time, move that case on into a final determination stage, 
whatever that may be. And we're going to increase the number of 
options that are available for enforcement so that we can take 
care of some of these things much more swiftly and fairly for 
both the consumer and the doctor. 

CHAIRMAN ROBERTI: Thank you. 

Any other questions of the members of the board by 



8 

the Members here? 

SENATOR CRAVEN: Let me just ask. 

CHAIRMAN ROBERTI: Senator Craven. 

SENATOR CRAVEN: Doctor, before you were born there 
was a development known as the Stader Splint. 

Do they still have a Stader Splint? Do you know what 
I'm talking about? 

DR. DORR: I've heard of a Stader Splint, but you're 
right, it was before I was born, and I think they used it for 
CDH, if I'm not correct. 

SENATOR CRAVEN: Say that again? 

DR. DORR: I think they used it for CDH. Wasn't it a 
splint that they used for CDH? 

SENATOR CRAVEN: They developed it for animals. 

DR. DORR: Yeah. 

SENATOR CRAVEN: It was developed by a veterinarian 
from Linwood, Pennsylvania. 

DR. DORR: Named Stader, right? 

SENATOR CRAVEN: Yes, Dr. Stader. 

CHAIRMAN ROBERTI: I'll bet you didn't think you were 
going to be asked that question. 

[Laughter. ] 

DR. DORR: No. 

SENATOR CRAVEN: I may be the only fellow today 
that'll ask that question. 

DR. DORR: You may be the only person in my life 
that'll ask that question. 

[Laughter. ] 



SENATOR CRAVEN: Well, it was somewhat discomforting 
to me when I looked at your date of birth and found out that 
that was developed before you were here. 

[Laughter. ] 

SENATOR CRAVEN: So, it developed before you did. 

But I appreciate that. I hadn't thought of that for 
a long time, but when you said your background as an orthopod, I 
thought, well, you know, he's got to know about it. 

DR. DORR: I have heard of it. I can tell you it's 
back there in the computer, but I'm glad I didn't get that asked 
on my oral examination for the boards . 

[Laughter. ] 

SENATOR CRAVEN: I used to pass that doctor's place 
of business going to school, and that's how I know. I can 
remember my father telling me what an innovative thing that was, 
to put something through a bone and put it together, and 
whatever . 

But that's just my pleasure today to talk to you, and 
I'm happy to have that response. 

DR. DORR: It's my pleasure. Thank you. 

SENATOR CRAVEN: I would be very happy to move. 

CHAIRMAN ROBERTI: Senator Craven moves both Dr. Dorr 
and Ms. McElliott be recommended to the Floor for confirmation 
as members of the Medical Board of California, Division of 
Medical Quality. 

Is there any opposition in the audience? 

Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 



10 



SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

CHAIRMAN ROBERTI: The vote is five to zero; 
confirmations are recommended, Dr. Dorr and Ms. McElliott 

MS. McELLIOTT: Thank you very much. 

DR. DORR: Thank you very much. 

[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
2:33 P.M. ] 

— 00O00 — 



11 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

. IN WITNESS WHEREOF, I have hereunto set my hand 
this (/? day of May, 1993. 




rELYN 
Shorthand Reporter^ 



!! 

23 

24 

j 

25 
26 

I; 

27 



28 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 12, 1993 
2:05 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 
MEMBERS PRESENT 
SENATOR DAVID ROBERTI , Chair 
SENATOR WILLIAM CRAVEN, Vice Chair 
SENATOR RUBEN AYALA 
SENATOR ROBERT BEVERLY 
SENATOR NICHOLAS PETRIS 

STAFF PRESENT 
CLIFF BERG, Executive Officer 
PAT WEBB, Committee Secretary 
RICK ROLLENS, Consultant on Bill Referrals 
NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

DANIEL APODACA, Member 

California State Lottery Commission 

SENATOR TOM HAYDEN 

MARK DAVIS, Sales Manager 
Commerce Printing 

ADRIAN PEREZ, Vice President 

Capital Cities Chapter 

Personnel Management Association of Aztlan 



Ill 



INDEX 



Page 



Proceedings 1 

Governor's Appointees: 

DANIEL APODACA, Member 

California State Lottery Commission 1 

Questions by CHAIRMAN ROBERTI re: 

Circumstances for Contract Extensions 1 

Amount of Money Paid to GTECH over Life 

of Current Contract and Percentage Considered 

Profit for GTECH 2 

Comparison to Former Contract 2 

Total Sales Generated during GTECH ' s Past 

Contract 3 

Concerns Raised by GORDON JONES re: RFP .... 3 

Conversion Time Too Short 3 

Were All Concerns Raised by MR. JONES 

Addressed by Final Draft of RFP 4 

MR. JONES' Satisfaction with Final 

Result 4 

Allegation of Destruction of Crucial Documents 
Establishing Favoritism to Successful Bidder . . 5 

Investigation by Attorney General 5 

Governor's Review Panel on Recent On-line 
Procurement 5 

Lottery's Response to Governor's Concerns 6 

Review and Documentation 6 

Significant Multiple Year Contracts . 6 

Use of Outside Consultants 7 

Total Cost of Contract 7 



IV 



INDEX (Continued^ 

Negotiated Contract's Relationship 

to Cost of Contract 8 

Vendor's Costs as Aspect of Contract ... 8 

Points Raised in Governor's Letter 

Already in Place 10 

Potential Legal Action by Unsuccessful 

Bidders to Recent On-line Contract 11 

Factors Used to Determine California Got 

a Good Deal with Recent On-line Contract .... 12 

Use of Criteria to Compare California 

Contract against Other State Contracts . . 13 

Attendance at All Lottery Meetings 13 

Return of Old Lottery Equipment 14 

Conditions under which Current Contract 

Might Be Amended and Authority To Do So .... 14 

Current Amended Contract for Keno 15 

How GTECH Became Sole Source Contract 16 

Allegations that Other Bidders Did 

Not Have Sufficient Time 16 

Extension of Time Framme 17 

Services Contracted with Batelle Memorial 

Institute 18 

Batelle' s Relationship to GTECH 18 

Questions by SENATOR AYALA re: 

Amount of Money GTECH Received in First 

Five Years under Original Contract 19 

Considered Part of Operating Expenses ... 19 

SENATOR TOM HAYDEN 19 

Failure of Commission to Ensure Competition 

in Bidding of Contracts 20 



V 



INDEX (Continued) 

Memos of GORDON JONES Expressing Strong 

Reservations about Extension of Six Months 

for Conversion Time 21 

Memo Re: Current Procurement Strategy ... 22 

Governor's Letter and "Troubling Questions" . . 
about Lottery's Ability to Conduct Major 
Procurements 24 

Limitations of Governor's Review Panel . . 24 

Current Contract Is Largest Contract in 

California's History 25 

Governor's "Troubling Questions" 

Justification to Re-open Process 25 

Response by CHAIRMAN ROBERTI re: 

Recent Court Decision on 

Confirmations 25 

Need for Investigation at All Levels 

on Competency Question 26 

Response by CHAIRMAN ROBERTI .... 26 

Attendance at All Commission 

Meetings 26 

Appointee ' s Lack of Knowledge as to Whether 

Staff Made Comparisons with Other States .... 27 

April 21 Memo to Commission by DIRECTOR SHARP . 27 

Economic Model Used in Negotiating Contract 

Is Lower than Actual On-line Sales .... 28 

Lack of Discussion at Public Meeting 
re: Lottery Giving GTECH 10,000 Upgraded 
Computer Terminals 28 

Nominee's Vote on Batelle Sole Source Contract 28 

Batelle's Projections Failed to 

Materialize 29 

Lottery Received only One Bid on Master 

Contract with GTECH 29 



VI 

INDEX (Continued) 

Questions to MR. APODACA by CHAIRMAN ROBERTI re: 

Sole Source Contract with Batelle 30 

Instances where Deloitte-Touche Have 

Performed Similar Functions 31 

Nominee ' s Vote for Contract that Involved 

Keno 31 

Master Contract in Effect for Services 

Only 32 

Purchase Contract for Equipment Did 

Not Go Out to Competitve Bid 32 

Amendment to Contract Allowed GTECH 
to Design and Operate a System that 
only GTECH Could Access 32 

Failure of Commission to Ensure Competition . . 33 

Statements by CHAIRMAN ROBERTI re: 

MR. CRAMER'S Failure to Attend Meetings .... 33 

Duty of Commission to Try to Get as Much 

Competition as Possible 34 

Does Not Appear to be Dereliction of Duties 

or Malfeasance 34 

Witness with Concerns: 

MARK DAVIS, Sales Manager 

Commerce Printing 34 

Work with High Integrity Systems 

to Produce Manual 35 

Conflicting Instructions from 

Lottery 35 

Frustration with Lack of Direction .... 36 

Electronic Test Unit to Have Been Tested 

Last November 36 

Pattern of Commission is Chaos 37 



VI 1 

INDEX ( Continued ^ 

Pattern of Rubber-stamping Director's Wishes . . 37 

Secret Meeting to Cancel Contract 38 

Responses by MR. APODACA 38 

Testing of Units 39 

Closed Meeting, not Secret Meeting . . 39 

Witness in Support; 

ADRIAN PEREZ, Vice President 

Capitol Cities Chapter 

Personnel Management Association of Aztlan 40 

Motion to Confirm 41 

Committee Action 42 

Termination of Proceedings 42 

Certificate of Reporter 43 



P-R-O-C-E-E-D-I-N-G-S 
--O0O00-- 

CHAIRMAN ROBERTI: We now have before us the 
appointment of Daniel Apodaca, Member of the California State 
Lottery Commission. 

Mr. Apodaca, could you please come forward, and thank 
you for coming. 

Mr. Apodaca, since you were last heard in the Senate 
Rules Committee, some questions have arisen regarding the most 
recent contract regarding the GTECH company. So, we have some 
questions, and in processing your nomination, we feel that these 
important questions haven't been adequately answered. 

The current on-line vendor for the California State 
Lottery is the GTECH Corporation. Its contract is for four 
years and three one-year extensions will expire in October of 
this year. 

Could you tell me under what circumstances are 
contract extensions granted by the Lottery? 

MR. APODACA: Under what circumstances, normally 
extensions are granted on bigger contracts such as the on-line 
gaming system that we're speaking of here. 

The advantage of the contract extension is that at 
the end of the five years in this case, the Lottery's in a 
position to negotiate a more favorable cost rate with the vendor 
GTECH. 

CHAIRMAN ROBERTI: So, the basis is a more favorable 
cost rate with the vendor? 



MR. APODACA: That's correct. 

CHAIRMAN ROBERTI: What amount of money has been paid 
to GTECH over the life of the current contract, and what 
percentage of that amount would be considered profit for GTECH? 

MR. APODACA: The negotiated percentage is 2.895 of 
gross sales. 

CHAIRMAN ROBERTI: 2.895? 

MR. APODACA: Yes, sir. 

CHAIRMAN ROBERTI: What percent of that would you 
consider GTECH profit? 

MR. APODACA: I have no idea what their profit 
structure is, but it's estimated that they will be paid 
approximately $203 million during the five-year period. 

CHAIRMAN ROBERTI: Give me that again? 

MR. APODACA: $203 million during the five-year 



period. 



period. 



CHAIRMAN ROBERTI: $203 million over the five-year 



MR. APODACA: This compares with $270 million that 
has been paid to them under the existing contract that expires 
in October of this year. 

CHAIRMAN ROBERTI: How much as of October? 

MR. APODACA: 270 million. 

CHAIRMAN ROBERTI: Has already been paid? 

MR. APODACA: Yes. 

CHAIRMAN ROBERTI: And over the next five-year 
period, you anticipate 203 million? 



MR. APODACA: About 203, as I recall. 

CHAIRMAN ROBERTI: While GTECH has had the past 
contract, what have been the total sales generated during the 
contract? 

MR. APODACA: Approximately $9 billion. 

CHAIRMAN ROBERTI: On April 21st of this year, the 
Lottery Commission awarded the new on-line contract to the GTECH 
company. GTECH was the only company that chose to submit a bid 
for the procurement. There's been a lot of press interest and 
interest from other very interested parties that has focused on 
certain memos written by Mr. Gordon Jones of the Lottery finance 
unit during the preparation of the RFP. 

Could you explain at what stage of the RFP process 
were Mr. Jones' concerns raised about the contract process? 

MR. APODACA: Mr. Jones is the chief of the financial 
section of the Lottery. He raised the question of sufficient 
time to conduct the conversion and implementation of the*new 
system. In his opinion, it was too short. 

CHAIRMAN ROBERTI: And what is his position again? 

MR. APODACA: The original draft for the Request for 
Proposal called for a four-month conversion period. He wrote a 
memo that stated in his opinion, four months was too short. 

CHAIRMAN ROBERTI: Why did he say four months was too 
short? 

MR. APODACA: I don't know. 

I may add that the Evaluation Committee that worked 
and developed the Request for Proposal, did all the leg work in 



4 

acquiring this bid, also came to the same conclusion, that four 
months appeared to be too short. As a result of this, the time 
period was extended to six months. 

CHAIRMAN ROBERTI: Did the Evaluation Committee make 
any judgment as to the six months then? 

MR. APODACA: Yes, they did. 

CHAIRMAN ROBERTI: Was that sufficient time for them? 

MR. APODACA: Yes. 

CHAIRMAN ROBERTI: How about Mr. Jones? 

MR. APODACA: He was satisfied with six months. 

CHAIRMAN ROBERTI: When did the six months run, until 
what date? 

MR. APODACA: I believe through — it should be up 
and running on October the 14th, when the present contract 
expires . 

CHAIRMAN ROBERTI: Were all the concerns raised by 
Mr. Jones, any others besides the time, the shortness of time, 
were all the questions that Mr. Jones addressed in his letter 
addressed by the final draft of the RFP? 

MR. APODACA: They were all satisfied. 

CHAIRMAN ROBERTI: Was Mr. Jones, in your mind, 
totally satisfied? 

MR. APODACA: Yes, he was. 

CHAIRMAN ROBERTI: And the main thrust of his letter, 
again, was the four months, which I guess later became an issue, 
the four months being extended to six months? 

MR. APODACA: That is correct, Senator. 



CHAIRMAN ROBERTI: Now, I guess the concern revolves 
around the fact that there's a sole bidder here. It's been 
alleged that documents crucial to establishing whether or not 
favoritism was shown to the successful bidder for the new 
on-line contract were purposely destroyed by the Lottery staff. 

Do you know about this allegation? Do you know if 
there's any truth to this charge? Do you feel you're in a 
position to say that the charge was groundless? 

MR. APODACA: I do know, Senator, that the Attorney 
General conducted an investigation and found that there was no 
basis to the allegation. 

CHAIRMAN ROBERTI: When did he conclude that 
investigation? 

MR. APODACA: That I do not know. 

CHAIRMAN ROBERTI: When did he begin it? 

MR. APODACA: I would say within the last month or 
so. 

CHAIRMAN ROBERTI: Were you notified to that effect, 
or was the Lottery Commission notified to that effect? 

MR. APODACA: Staff notified the Commissioners, yes. 

CHAIRMAN ROBERTI: The Attorney General's staff? 

MR. APODACA: No, staff -- the Lottery staff notified 
the Commissioners at the conclusion of the investigation. 

CHAIRMAN ROBERTI: The Governor's indicated that he 
has convened a review panel, or he had convened a review panel, 
to determine whether or not this recent on-line procurement 
should proceed. While finding no impropriety in the process, 



I'm told the Governor's Office did conclude that there were 
troubling questions about the process. 

Could you please detail to the fullest extent that 
you can for the Committee how the Lottery is responding to the 
concerns raised by the Governor in his review panel, and to what 
extent can you elucidate for us what those troubling questions 
were, and again, how you responded to them? 

MR. APODACA: I do have a copy of the Governor's 
letter, if I may be permitted to read — 

CHAIRMAN ROBERTI: Please. 

MR. APODACA: — the section that has to do with the 
troubling questions. 

CHAIRMAN ROBERTI: If you want, submit the Governor's 
letter in evidence. We would appreciate that. 

MR. APODACA: Fine. 

CHAIRMAN ROBERTI: Read the relevant part, and then 
we'd be glad to make a copy of the Governor's letter. 

MR. APODACA: Fine. 

There are four points that he made in his letter. 
One had to do with review and documentation: 

"The California State Lottery should 

review and document the current 

procurement process to establish a 

specific sequence of activities, assigned 

responsibilities, and levels of approval." 

The second point that the Governor's letter contained 
had to do with significant multiple year contracts: 



"For significant lottery contracts 
that will remain in force over multiple 
years and involve new applications of 
technology or asset acquisition by the 
lottery, a more definitive procurement 
process should be outlined, including: 

"A prequalif ication solicitation of 
vendors to assess important evaluation 
criteria ..." 

Then he goes on to list things like: financial solvency, 

potential areas of conflict, disclosure of litigation history, 

et cetera. 

The next item that he noted was use of outside 

consultants: 

"Use of outside consultants is 
unquestionably appropriate in the highly 
specialized world of the lottery 
procurements. However, the role of the 
consultant should be clearly delineated 
and should include a specific commitment 
to statewide procurement requirements in 
addition to specific Lottery objectives." 

The fourth and final point that he made was: 

"Although a percentage of the sales 
formula for compensation may have 
advantages, the total cost of the contract 
should bear some relationship to the 



8 

vendor's actual expenditures plus a fair 

and reasonable profit. This means ..." 

CHAIRMAN ROBERTI : Give me that last one again? 

MR. APODACA: [Quoting from Governor's letter] 

"... the total cost of the contract should 

bear some relationship to the vendor's 

actual expenditures plus a fair and 

reasonable profit." 

CHAIRMAN ROBERTI: Would you say that the contract 
that was negotiated bore no relationship to, or little 
relationship to, the cost of the contract? 

MR. APODACA: That's difficult to say, since I don't 
believe that staff at the Lottery's office has access to the 
vendor's cost in this contract. It was negotiated strictly as a 
percentage of gross revenue, like all — essentially all Lottery 
contracts are negotiated now. The prior contract — 

CHAIRMAN ROBERTI: Have you changed that, or are you 
in the process of changing it? Do you think that should be 
changed, that the cost should be a factor in the negotiation of 
the contract? 

MR. APODACA: I'm sorry, would you rephrase the 
question? 

CHAIRMAN ROBERTI: Are you in the process of changing 
that? Do you think it should be changed, that vendor's costs 
should be an aspect of the cost of the contract? 

MR. APODACA: It's difficult for me. My personal 
opinion is that the process should ensure fair competition and 



invite as many bids as possible. 

We really — I don't think that the Lottery's in the 
position to determine exactly what the cost of a vendor's 
contract is going to be. It's difficult to assess that. Number 
one, it's at the beginning of the contract. Nobody knows for 
sure what the costs will be. 

CHAIRMAN ROBERTI: But you're saying that in the 
Governor's letter, he's indicated that that ought to be a 
factor. 

MR. APODACA: That's correct. He is saying that it 
should bear some relationship to cost. 

Now, in our immediate contract, in the contract that 
was just negotiated, at the end of five years it is anticipated 
that the Lottery staff will be able to negotiate a much better 
cost rate with the vendor, with GTECH, simply because — 

CHAIRMAN ROBERTI: Why would that be five years from 
now that you couldn't do this year? 

MR. APODACA: Well, it's simply because GTECH ' s costs 
are already in place, and in order to extend the contract for 
them, the cost is not going to be as great as it would have been 
in the initial five years. 

CHAIRMAN ROBERTI : Why weren ' t they already in place 
for the past five years? 

MR. APODACA: That was a totally different concept. 

The old contract called for the Lottery to own its 
equipment. In the new contract, GTECH, the vendor, is to 
provide all of the equipment. The Lottery is getting out of the 



10 

computer business. 

CHAIRMAN ROBERTI: You're saying the basis under 
which GTECH was bidding was altogether different. 

MR. APODACA: That's correct. 

CHAIRMAN ROBERTI: Altogether different. 

MR. APODACA: Totally different. 

CHAIRMAN ROBERTI: You didn't have a cost basis upon 
which to rely. 

MR. APODACA: That is correct. 

CHAIRMAN ROBERTI : Am I then to understand when the 
Governor's letter indicates that there should be new processes 
or four points, he's basing part of that on information that 
we'll have in the future that we didn't have in the past? 

That we should have these four new bases upon which 
we are going to negotiate or ought to negotiate a vendor's 
contract, that is based in part, at least, on the fact that in 
the future, we will have information that was not available to 
you? 

Is that right or is that wrong? 

MR. APODACA: If I understand the question, the four 
points that were raised in the Governor's letter, most of them 
are already in place, not exactly the way that the Governor's 
letter addresses them, but in a different way. 

For example, he recommended that the Lottery prepare 
a model of a contract based on different probabilities. For 
instance, in this contract, there is already a system where the 
Lottery will prepare a cost benefit analysis. They get the same 



11 

information but in a different way. 

CHAIRMAN ROBERTI: How exactly are you responding to 
the concerns raised by the Governor? 

MR. APODACA: Staff at present, staff is preparing a 
report to the Commission in which they will address every one of 
these items that were pointed out to in the Governor's letter in 
detail. That has not been prepared as yet. 

CHAIRMAN ROBERTI: That is for future contracts that 
are negotiated -- 

MR. APODACA: That is correct. 

CHAIRMAN ROBERTI: — as far as vendor, and I guess 
anything else? 

MR. APODACA: Anything else. 

CHAIRMAN ROBERTI: I just had a telephone call that I 
have to respond to now, so we're going to recess for ten minutes 
without objection. I'll be right back. 

[Thereupon a brief recess was taken.] 

CHAIRMAN ROBERTI: Rules Committee will reconvene. 

In the case of the recent on-line contract awarded to 
GTECH, we hear of potential legal action by unsuccessful or 
disappointed vendors. 

Is this type of legal response unique to the State of 
California, or does it occur in other states? What's the 
uniqueness of this practice in California? 

MR. APODACA: Apparently, from what I've been told, 
this is not unique to California. Apparently people like to sue 
each other in the lottery. For instance, the unsuccessful 



12 

bidder was recently involved in a lawsuit, I believe, in New 
York. We had recent — the California Lottery recently had 
experience with GTECH, in that GTECH sued the Lottery last year 
over a contract that they did not receive. 

CHAIRMAN ROBERTI: So, it's your feeling that the 
response in California is not too dissimilar? 

MR. APODACA: Apparently not, Senator. 

CHAIRMAN ROBERTI: An on-line contract of the size 
and type which the California Lottery has just awarded, where 
the entire system is being upgraded and replaced, would seem to 
be initially very cost-intensive for the vendor. 

Since you said this time it's hard to factor in cost, 
how did you go about determining that California got a good 
deal? What were the factors? 

MR. APODACA: Originally, the Lottery staff made 
their own calculation of what they thought it was going to cost. 
And as I remember correctly, they came up with the number of 
from 4% to 4.2%, somewhere in that area. That included the 
telecommunications system. 

CHAIRMAN ROBERTI: What was the amount again? 

MR. APODACA: From 4% of gross sales to 4.2% of gross 
sales, which included the telecommunications system, which, with 
the existing contract, amounts to approximately 1% of gross 
sales. Therefore, the percentage figure that was ultimately 
negotiated with GTECH is under what was -- what had been 
estimated by the staff in the Lottery. 

In addition to that, the existing contract today 



13 

costs less than the — or the equipment costs less than the 
equipment cost seven years ago. 

Also, comparisons to other states; for instance, 
Georgia recently negotiated a contract in which their percentage 
was 2.998, I believe, somewhere in that area, just slightly 
above California's. 

CHAIRMAN ROBERTI: And what's the California percent 
again? 

MR. APODACA: 2.895. 

CHAIRMAN ROBERTI: Did you use any other criteria to 
compare the California contract against other state contracts, 
besides the percentage? 

MR. APODACA: I'm sure that they did. 

CHAIRMAN ROBERTI: Right. 

MR. APODACA: At least, I do not know for a fact that 
they did, but I would think that the Lottery staff would have, 
yes . 

CHAIRMAN ROBERTI: When you made your decision on 
what was good for California, what were the factors you took 
into consideration? 

MR. APODACA: Well, the facts that I considered 
certainly were those that I just stated to you. In addition to 
that, we observed closely the Request for Proposal process, the 
presentations that had been made to the Commissioners at the 
Lottery meetings . 

CHAIRMAN ROBERTI: Did you attend all the Lottery 
meetings? 



14 

MR. APODACA: Yes, sir. 

CHAIRMAN ROBERTI: Give me again the factors. You 
took into the factors the staff recommendations, the percentage 
rate as it compared with other states, and what else? 

MR. APODACA: The fact that the current contract has 
— is costing less than the original contract of seven years 
ago. That was a factor. 

CHAIRMAN ROBERTI: On the question of the equipment, 
did the Lottery receive anything in return for the old 
equipment? 

MR. APODACA: I believe there was a price concession 
of some sort worked out with GTECH. 

CHAIRMAN ROBERTI: Where they reduced the price to 
us? 

MR. APODACA: I believe so. 

CHAIRMAN ROBERTI: To the state. 

Is this going to be a practice that the Commission 
intends to keep in the future? 

MR. APODACA: We won't have that problem in the 
future since the Lottery is getting out of the computer 
business. We will not own the equipment. 

CHAIRMAN ROBERTI : Are there any conditions under 
which the Lottery Commission might find it necessary to amend 
the current Lottery contract, and do it have authority for doing 
so? 

MR. APODACA: I believe it does have authority to do 
so, and I can see several conditions under which it would be 



15 

incumbent to amend the contract. For instance, a 
technological advance, where new equipment might be available 
that the Lottery does not currently have that may be substituted 
for existing equipment. 

At the end of the initial five years, the contract 
may be — will probably be amended to renegotiate the rate, if 
there are any extensions granted. 

CHAIRMAN ROBERTI: Additionally, the current amending 
of the contract as it regards to the Keno game has drawn some 
concern. 

Can you tell me why the present contract was amended 
in that regard? 

MR. APODACA: Yes. Originally, the Lottery 
contracted with a vendor other than GTECH to provide it with 
Keno terminals. The Keno game was supposed to have started in 
the early part of November of 1992. As the time for starting 
the game drew near, it became apparent that the vendor that was 
supposed to supply the terminals was not going to comply. 

It then became a business decision on the part of the 
Lottery whether to postpone the introduction of Keno, to 
contract with GTECH that did have the terminals available, or to 
give the existing contractor an extension. The Lottery made the 
decision to get the terminals from GTECH and proceed with its 
original plans of inaugurating Keno in the early part of 
November . 

CHAIRMAN ROBERTI: Now, the most controversial aspect 
of the GTECH contract, the most recent, is the fact, I would 



16 

say, that it was a sole source contract. How did that come 
about? 

MR. APODACA: It was a surprise to many of us. I was 
at a meeting, at a Commission meeting on February the 10th, and 
one of the questions that I asked Mercedes Azar, who is the head 
of the Evaluation Committee, was how many bidders do we expect? 
She replied to me that we expected three, since three vendors 
had attended all the bidders conferences, had asked the 
questions, had been involved in the evaluation of the RFP, and 
so forth. 

It was not until the day before the bids were to be 
received that it was learned that we would only have one bidder. 

CHAIRMAN ROBERTI: So, you thought there were going 
to be three on February 10th. Then what happened? 

MR. APODACA: Well, nothing happened. I got a call 
from — as all the other Commissioners -- from the Director 
saying that AWA had decided not to bid. This was the day before 
the bids were supposed to have been received. 

CHAIRMAN ROBERTI: On what day again did you find out 
there was only going to be one? 

MR. APODACA: I believe it was like the bids were to 
have been received on February the 17th, and this would have 
been the day before, the 16th. 

CHAIRMAN ROBERTI: The other potential bidders allege 
that they didn't have enough time to make their bids. 

What validity is there do you find? 

MR. APODACA: Well, I understand that the AWA, the 



17 

most vocal of the unsuccessful bidders, recently submitted a bid 
to the State of Georgia for their lottery system that had the 
same time frame as California's. 

And I do know that the Lottery did everything that it 
could to meet the time frames that -- reasonable time frames 
that had been requested by extending the conversion period. 

CHAIRMAN ROBERTI: So, there was a time frame 
extension. In Georgia, you're saying — what's the name of the 
company? 

MR. APODACA: AWA. 

CHAIRMAN ROBERTI: They did operate within the 
constraints, or within a more constrained time frame? 

MR. APODACA: The same as California's. 

CHAIRMAN ROBERTI: Same as Calif ornia; s . 

MR. APODACA: Yes. They did submit a bid, but they 
were not successful. 

CHAIRMAN ROBERTI : Do you think the concern that they 
didn't have enough time is legitimate, or is it specious? 

MR. APODACA: I'd rather not say. I really don't 
know. 

CHAIRMAN ROBERTI: In your knowledge, however, the 
people that gave you time frames to work with indicated — 
that's Mr. Jones and the other group you mentioned was — 

MR. APODACA: The Evaluation Committee. 

CHAIRMAN ROBERTI: — the Evaluation Committee had 
indicated that an extension from four to six months would be 
proper? 



18 

MR. APODACA: Yes, and in addition, Batelle Memorial 
Institute told us that the time frame is not uncommon in the 
lottery industry. 

CHAIRMAN ROBERTI: Six months? 

MR. APODACA: Six months, correct. 

CHAIRMAN ROBERTI: You contracted with Batelle. For 
what services did you contract with them? 

MR. APODACA: For a number of services. They were 
— acceptance testing of the Keno system was one. To assist the 
Lottery in the preparation of the Request for Proposal. 
Evaluation of bids. 

CHAIRMAN ROBERTI: Were they the evaluator? 

MR. APODACA: No, the Evaluation Committee -- wait a 
minute. I believe that they worked with the Evaluation 
Committee in doing the evaluation, but they did not — were not 
involved in the final decision process. 

CHAIRMAN ROBERTI: Does Batelle have a relationship 
with GTECH? 

MR. APODACA: No, no. Batelle works only for 
lotteries . It does not work for vendors . 

CHAIRMAN ROBERTI : I don ' t right now have any more 
questions . 

Does anybody else have any questions? Senator Hayden 
is here on this nomination. 

Senator Ayala. 

SENATOR AYALA: I just have a point of clarification. 

Mr. Apodaca, as I recall, the original initiative 



19 

that created the Lottery system in California in 1984 had a 
percentage that went for management, a percentage for prizes, 
and a percentage of the gross for education. 

MR. APODACA: That is correct. 

SENATOR AYALA: The first five years of the GTECH 
contract, they received $250 million; is that correct? 

MR. APODACA: Let's see. I believe it was for the 
seven years, from the — they had an original contract for five 
years, and they've had two one-year extensions. 

SENATOR AYALA: But for the first five years, it was 
roughly 250 million? 

MR. APODACA: That I don't know. It was $270 for the 
seven years, but for the five years — 

SENATOR AYALA: My question is, is that part of the 
operating expenses under that category, whatever it costs for 
the contract is under that percentage that goes for the 
operating of the system? 

MR. APODACA: Yes, it is. 

SENATOR AYALA: Thank you. 

CHAIRMAN ROBERTI : Any other questions from the 
Members? 

Senator Hayden, would you like to come on up to the 
desk here. Do you want to speak to the nomination, or do you 
have some questions you want to ask? 

SENATOR HAYDEN: Senator, I indicated my concerns in 
a letter. I do have some questions. 

CHAIRMAN ROBERTI: Normally we ask questions through 



20 

the Chair. However — 

SENATOR HAYDEN: I'd be glad to — 

CHAIRMAN ROBERTI: However, I don't feel like 
interpreting the questions . 

SENATOR HAYDEN: I could give it as testimony, and 
the gentleman could respond. 

CHAIRMAN ROBERTI: I think that would be preferable. 
Why don't you make a statement incorporating your concerns, and 
then we will let Mr. Apodaca respond. 

SENATOR HAYDEN: All right, I'll try. 

I'm here as a concerned Senator, not an expert on 
lottery finance and have no personal reason to have any personal 
criticism of Mr. Apodaca. 

I do, however, have concerns about the process which 
peaked in the sole source bid. They lead me to some worry about 
the whole process . 

You have a very large vendor entity, then you have a 
strong staff. You have Commissioners who are part-time, who are 
there to serve as watchdogs and are compelled under state law to 
ensure competition. 

I believe that's the exact phrasing, isn't it, Mr. 
Apodaca? 

MR. APODACA: I believe so. 

SENATOR HAYDEN: And then a Rules Committee and then 
a Senate. There are these layers of part-time supervision, and 
I believe this is a case where all of the part-time supervision 
has failed to yield the result of ensuring competition. That 



21 

was my first and primary interest. 

With respect to Mr. Apodaca, I believe that he is a 
member of the Lottery Commission serving in the slot as an 
accountant. And I presume -- since my father was an accountant, 
I've spent many years pondering this business -- that this was 
to ensure that there would be somebody there with independent 
eyes and ears and capability to watch the finances and the 
books . 

The questions that I have primarily would revolve 
around votes that Mr. Apodaca cast, and I will simply comment on 
those votes, and he'll have an opportunity to respond. 

But before I do that, sitting here listening to his 
testimony, certain questions became more of concern to me. He 
said, for instance, that Mr. Jones, whose memos this controversy 
revolves around to a large extent, was satisfied with the six 
months as opposed to the four months . Those memos are 
interesting reading, and I don't know how available they were to 
Commission members. And if I were to put this as a question, of 
course, I'd want to know if Mr. Apodaca had available to him all 
of the memos by Mr. Jones, raising serious questions about the 
four months, but also, contrary to what Mr. Apodaca just said, 
there were memos at late as December in which Mr. Jones 
expressed strong reservations even about the six months. 

Now, I know that when he came with Director Sharp to 
the Government Operations Committee, he said as much as or the 
equivalent of an expression of satisfaction with the six months. 
He was not asked about how that squared with his memo of a month 



22 

or two before. Let me read you what he was writing internally 
before he came with the Director under the glare of the Assembly 
hearing. 

"The primary concern ... " 
and he's speaking about the six months, not the four, 

"The primary concern relates to our 
current and tentative procurement strategy 
whereby the selected vendor would have the 
monumental contractual obligation to 
purchase or manufacture, to test and 
install approximately 12,500 terminals and 
8,000 interfaced monitors within a maximum 
of approximately six months. 

"While the successful completion 

it 

• • • 

and I note there he's referring to a six-month time frame, 

"While the successful completion of 

this task is certainly possible," 
and I would suggest to you that that is the equivalent of his 
later public testimony that's been referred to as 
"satisfaction, " but the context is quite clear, that he was 
troubled. 

"While the successful completion of 

this task is certainly possible, it may 

not be feasible to one or more potential 

bidders for a variety of fiscal and 

operational reasons." 



23 

And this was at a time that the Commissioners were being 
reassured that there 'd be three bidders. The memo goes on: 

"Consequently, if we stick to this 
requirement ..." 
the six months requirement, 

"... we might easily scare away one or 
more potential bidders who simply are not 
willing to risk significant contractual 
penalties for not completing such a 
demanding task in, relatively speaking, a 
very brief amount of time. The end result 
might well be that we receive only one 
responsive bid, or worse yet, no bids at 
all. " 
The memo goes on, page after page, raising red flags about the 
six month time frame. 

It seems to me that the Commissioners and anybody 
examining this should have had this memo before them and 
employed it when they were making this decision. And to say 
here that Mr. Jones was satisfied with the six months, I think, 
goes against the tone, the grain, and even 99% of the substance 
of his written internal memos . 

Mr. Apodaca also referenced the letter from Governor 
Wilson. I asked you, Senator Roberti, if you had received this. 

CHAIRMAN ROBERTI: I just got it. I haven't had a 
chance to even read it yet. 

SENATOR HAYDEN: Well, my impression, from press 



24 

accounts, the Governor had held an internal investigation of 
some kind of all of this. And perhaps I wasn't listening that 
closely enough, but I didn't hear Mr. Apodaca reference page 2 
of the Governor's memo, the fifth paragraph down, which says: 

"... the information presented to the 

Panel does raise troubling questions ..." 
Troubling questions, 

"... about the [Lottery's] ability to 

conduct major procurements." 

I want to indicate that the Governor ' s letter seems 
to blame the competition for not stepping up to the plate, as if 
there was no forewarning of this sudden dropout. But it seems 
to me, the internal memos that I have just read to you, and 
there are plenty of them, indicate that there were warning 
signals enough that the competition might drop out. 

Furthermore as to the Governor's letter, I want to 
indicate the limitations of the supposed internal study that was 
done in the Governor's Office. He says: 

"While the panel's process was as 

comprehensive as the time allowed, there 

were limitations." 
To say the least. I'm not sure who was on this panel, but he 
indicates the panel did not have subpoena power, that oral 
presentations were unsworn. The panel relied entirely upon 
material which was voluntarily provided by the participants. 
They did not, and this is Governor Wilson's own language, "did 
not conduct an independent discovery effort," close quote. 



25 

That is not, to me, a sufficient investigation, and 
perhaps why the Governor said certain "troubling questions" 
remained. 

We can't apply those "troubling questions" — if we 
could figure out what they were, and they're buried between the 
lines in the Governor's letter — we can't raise those 
"troubling questions" and apply them in the future. We can't 
apply those questions to the future. 

I want to stress here that this contract, as far as I 
know, is the largest single contract of its kind in the history 
of the State of California. So, for the highest level, the 
Governor, to say that there were "troubling questions", seems to 
me a justification for re-opening the whole process and not an 
argument for applying it in the future, because we're not going 
to have a contract like this. 

CHAIRMAN ROBERTI: I might agree with you, Senator. 
Unfortunately right now, as you know, as well as I do, we're in 
the midst of troubling litigation -- 

SENATOR HAYDEN: I understand that. 

CHAIRMAN ROBERTI: — as to how far we can go with 
confirmations in regard to negotiating with them the performance 
of their duties. 

I happen to be outraged at the recent court decision, 
and I think we're going to try to appeal, but nevertheless, it's 
a -- 

SENATOR HAYDEN: I'm speaking only as an individual. 

CHAIRMAN ROBERTI: I understand that. 



26 

It's a specter that hangs over us. 

SENATOR HAYDEN: Well, no, let's put it this way. 
I'm not calling for the Governor to do anything. I'm not asking 
the Senate to try to make the Governor do anything. 

I'm saying that to say that the biggest contract in 
the history of this state raises "troubling questions" about the 
way in which it was obtained should suggest that the 
investigation go on at all levels. 

Our business, as I narrowly construe it, Senator 
Roberti, is the competency question. 

CHAIRMAN ROBERTI: I do think on that question there 
is a distinction between Mr. Apodaca and Mr. Cramer simply 
because Mr. Apodaca has answered that he did attend all the 
meetings, especially all the meetings relating to the GTECH 
contract. 

I want to state this for the record, and then you 
give me the opportunity in your observation. 

Whereas, Mr. Cramer, to my knowledge, and I hope I'm 
not wrong, did not, and the Commission has to exercise 
independent judgment. And in Mr. Cramer's case, that's hard to 
understand if he was able to do that if he wasn't at the 
meetings . 

I don't want to make a subjective statement as to 
whether he did or he didn't, but it's awfully hard to convince a 
panel that that was the case if he didn't attend the meetings, 
which I think was one of the points you raised as well. 

SENATOR HAYDEN: I agree with you. 



27 

I'm here to comment on Mr. Apodaca's — 

CHAIRMAN ROBERTI: I agree, but you gave me the 
chance to read that into the record because it ' s an important 
point . 

SENATOR HAYDEN: I'm here to comment on Mr. Apodaca's 
votes, but first I am making observations about his testimony to 
you. 

The next point that I wanted to make about that 
testimony is that he acknowledged a moment ago that he didn't 
know if the staff had made comparisons with other states, except 
for Georgia. 

I don't believe there's any comparison to be made 
between California and Georgia, and I would think that there is 
a reason to expect that Commissioners would ask about the 
analysis of other states, which, by the way, was done; not only 
in the GTECH matter, but in the Batelle matter. 

He also said that he was informed that the contract 
was a $203 million contract, more or less. That is exactly 
correct, and the only thing to point out is that it was 
described as approximately 203 million in the April 21st memo to 
the Lottery Commission by Director Sharp. 

As far as I know, there were no prior memos before 
this memo, which I find to be an amazing document, even for one 
as untutored as I am, as a memo recommending approval of the 
largest contract in the history of the State of California. It 
says that it is a reimbursement at a flat 2.895% of the on-line 
sales, as we know, for a five-year total of $203 million. 



28 

The $203 million, according to the analysis, is based 
on an average of 1.4 billion over the next five years. But 
on-line sales in '88-89 and '89-90 were 1.8 billion, and in 
'90-91 were 1.7 billion. So, if sales remain at that level over 
the next five years, much higher than the 1.4, which is the key 
to the economic model, then the 203 million will be a minimum 
and certainly would be substantially exceeded in the 
profitability to GTECH. 

This information was apparently not supplied or 
certainly not discussed at this meeting. In the public part of 
the meeting, the reason given for the lowering of the percentage 
was that there ' d been great negotiations on the part of staff, 
and the removal of a few options, such as extensions into 
Winnebego motorhomes . 

But there was no discussion on the public record that 
I know of at this meeting that the Lottery had given back GTECH 
10,000 terminals that it had just upgraded, that it gave back 
the computer platforms that California had just purchased; that 
that was a gift back of $50-60 million. And if the $50-60 
million was combined with the difference between the 2.8% and 
the 1.5% in New York, it equals an additional 98 million. The 
state could have lost $148 million on that decision, and there's 
no public record of any such analysis or discussion of that 
decision. 

On the Batelle management contract, on August 13th of 
last year, Mr. Apodaca voted for the no bid contract with 
Batelle. The situation, as I understand it, was as follows. 



29 

The Lottery sought expertise in preparing its master contract 
RFP leading up to the big one. And they hired Batelle for 
$200,000, or as it says, up to, not to exceed $200,000. 

This was a sole source bid, without competition, even 
though the State of Oregon recently had similar needs and had 
received three bids, ultimately choosing another firm named 
Deloitte-Touche for a fraction of Batelle' s price. 

The no bid contract yielded some interesting 
promises. Batelle said the contract the consultant was writing 
would be a bargain in the range of 1.5-1.7% of sales. What 
became of that, I don't know, because GTECH ' s sole bid came in 
at 2.895. 

Batelle also stated very rosily that: 
"It's our opinion that the 

California Lottery will attract at least 

three lottery vendor proposals that can 

address the objectives of the Lottery." 
Those promises failed to materialize. 

The question for the accountant member of the 
Commission would be: why vote for a no bid contract with 
Batelle, and why not call for greater scrutiny on the master 
contract's scope and price? 

The master contract. The Lottery received only one 
bid. That's the biggest one in history. There were repeated 
internal staff memos warning that the contract was written so as 
to limit competition and generate only one bidder. 

For example, a memo of 11/5/92: 



30 

"The biggest disadvantage to a 

bungled procurement is the risk of getting 

one or possibly two bids, and in a worst 

case scenario, paying an inflated 

noncompetitive price for needed goods . " 
Close quote. 

I will not bore you with the four or five other 
quotes that indicated that. 

I'm not sure what Mr. Apodaca did to see that 
competition was ensured. 

CHAIRMAN ROBERTI: Before we get off the subject, to 
go back to the Batelle contract, Mr. Apodaca, could you -- 
because I don't think we spoke directly or asked you questions 
directly on why the sole source on Batelle. 

MR. APODACA: May I answer? 

CHAIRMAN ROBERTI: Yes, please. 

MR. APODACA: Batelle is the prominent lottery 
adviser in the country. It has successfully completed over, I 
think, 16 engagements with state lotteries in advising them on 
the procurement of their on-line system. 

In addition to that, it's got all — it has a history 
of almost 50 engagements in advising lotteries in other areas. 
It works only for lotteries. It does not work for vendors. Its 
credentials are impeccable. That's why we decided and felt 
comfortable with a sole source contract. 

CHAIRMAN ROBERTI: Do you know of any other instances 
where the other firm that Senator Hayden made reference to, 



31 

Deloitte-Touche, has ever performed these lottery advisory 
functions for other lotteries? 

MR. APODACA: The Oregon instance that Senator Hayden 
is referring to did not involve the firm of Deloitte. I 
understand that the State of Oregon hired an employee from 
Deloitte-Touche to do independent evaluation and testing for 
them. 

CHAIRMAN ROBERTI: So to your knowledge, it was not 
Deloitte-Touche itself? 

MR. APODACA: No. 

CHAIRMAN ROBERTI: Senator Hayden. 

SENATOR HAYDEN: Well, but the point is, Oregon went 
out to bid and got a much lower price for their work product. 

The second point is that the Batelle work product 
made projections of three bidders that evaporated. They said 
that they'd get a contract with 1.5-1.7%; never happened. 

So, the noncompetitive bid, the sole source bid that 
brought in Batelle with all of its renowned expertise, yielded a 
report from Batelle that was completely off track in terms of 
what finally happened. 

It might have been corrected with competitive 
bidding. 

On the issue of Keno, just one other issue, on 
September 16th of last year, Mr. Apodaca voted for the contract 
that involved Keno. And let me take a moment here to see if I 
can explain in terms that even I can understand what this was 
about . 



32 

There was a master contract that in effect in 1992 
with GTECH that's explicitly for services only. The Commission 
wanted to expand into Keno, and they used the master contract, 
which is for services only, as the vehicle to procure equipment, 
which is, I believe, explicitly prohibited by state law. 

The purchase contract for equipment for Keno should 
have gone out to competitive bid, if I understand state law. 
The procurement was very — it was very difficult, I think, for 
anyone to notice, but it was in the services contract. And yet, 
this Amendment 15 was written and passed on the vote of the 
Commission, which involved the purchase of equipment. The 
equipment was 2,000 lottery terminals for the state from GTECH. 

The same Amendment 15 allowed the end or phase-out of 
the Lottery Commission's previous policy of promoting 
competition by having many contractors bidding for pieces of 
Lottery operations: design, equipment, purchase, maintenance, 
GTECH 's existing contract required what they call "open 
architecture", or a design that could be tapped into by 
equipment designed by other computer companies. But the 
amendment that was voted on to the contract did away with that 
requirement. 

The net effect of this was to allow GTECH to design 
and operate a system that only GTECH could really technically 
access. That significantly benefitted GTECH by reducing 
competition in the bidding process, and in effect, making the 
Commission and the Lottery hostage to a technology that only 
GTECH, the vendor, could access. 



33 

So, in this case, the whale starts to swallow the 
fisher person. 

That is it. I think that these are votes that 
clearly any one of us might have entertained making. It's a 
hard job, but I really think there's been a failure to ensure 
competition, which is the statutory mandate. The sole source 
decision on April 21st, which was the biggest in the state's 
history, is one that has brought this issue to light. One of 
the Commissioners in the wake of this has resigned, as you've 
indicated. 

He would have been appointed, Senator Roberti, if the 
previous recommendation of the Rules Committee had been followed 
on the Senate Floor. 

So, I hope that some light has already come from 
this, and that the Rules Committee will find some way to pursue 
this investigation further. 

Everything that I've said is based on public record 
and documents. And I tell you, I have a fear that I've only 
scratched the surface. 

CHAIRMAN ROBERTI: Thank you, Senator. 

I personally am not prepared to say that either 
Mr. Cramer or Mr. Apodaca have engaged in any improper activity. 

I do state that Mr. Cramer's failure to attend the 
meetings, which frankly just came to light, when this major 
contract — as Senator Hayden puts it — the largest in the 
history of the state, I don't know if that's the case, but it 
sure seems like it may be — didn't attend those meetings. I 



34 

mean, if you don't attend that meeting, then why are you on the 
Commission, or you better have a very good reason. It also 
indicates that it's much harder to exercise independent judgment 
if you're not there. I guess you can, but it's harder to 
establish that case. 

In your case, Mr. Apodaca, I personally don't want to 
engage in micro-managing your role as a Commissioner. You come 
well regarded with numerous recommendations for your 
confirmation, as you did previously. 

But it does appear, I would say, that the Commission 
has a duty to affirmatively try to get as much competition in 
the bid as it can, and it does appear that this was lacking. 

It does not appear to me that this was the result of 
dereliction of duty or malfeasance in the performance of duties, 
but I do think the Commission ought to and must try harder in 
the rendition of all these contracts. 

We have another witness, Mr. Mark Davis of Commerce 
Printing Services. 

Mr. Davis, why don't you come on up. 

Are there any other witnesses here besides Mr. Davis? 
Fine, we'll take you next. 

Yes, Mr. Davis. 

MR. DAVIS: Thank you. 

I'm Mark Davis. I'm the Sales Manager at Commerce 
Printing. We're a local printer here downtown. And I just 
briefly wanted to give a little bit of my history, my 
experience. You'll be glad to know it doesn't regard the GTECH 



35 

contract. But just to shed — if it'll broaden the perspective. 
I'm just going to read this real briefly just to give you the 
facts of what my experience has been. 

We're a minority-owned firm. We've got about 50 
employees, and we try very hard to earn business with many of 
the people here, Tower Records, Multiple Sclerosis, many other 
companies . 

My personal experience started last June when we 
started working with the High Integrity Systems, and we began 
working with them to produce -- we had got a contract to produce 
a manual for a product they would produce for the Lottery. 
Originally, the manual was to be produced by the first part of 
November, I believe, of last year, and we were supposed to have 
a manual at about that point. 

The staff of the Lottery seemed to flounder back and 
forth with instructions on how the manual should be assembled, 
what it should contain. This process of indecision went on for 
months. One committee wanted one certain set of illustrations 
or instructions, the other one wanted it deleted. 

The High Integrity Systems people would make the 
corrections. They'd be back as quickly as they could. It just 
go to another committee or department of the Lottery who would 
see things completely differently and wanted these illustrations 
added back in, and larger, or different things added or deleted, 
with emphasis on some things and not others. 

As I would check back with my contacts there from 
time to time, I could feel the frustration of a group of people 



36 

who couldn't get -- seem to get a straight answer. Never seemed 
to be any clear direction or leadership on behalf of the Lottery 
on whether they really wanted to go with these particular parts 
of the deal. 

Now, as I understand it, up to 15 different 
committees or departments and other elements of the Lottery 
organization were reviewing the manual, each injecting their own 
opinions, each feeling they had authority to override the other 
departments . No one seemed to be in charge of mandating the 
specific direction. 

Finally, High Integrity Systems just handed over the 
computer disks for them to go ahead and finish the manual on 
their own and just give it back to them when they were finished. 
It was still not received to this date, a finished copy for us 
to print. And we're approaching almost a year. And of course 
now, with the recent decision to terminate the contract, I'm 
sure that's on hold, if not completely eliminated. 

From what I understand, this is not just an isolated 
incident of how the Lottery conducts business. The electronic 
device that they were — that the High Integrity Systems was 
supposed to produce, we originally were supposed to have a test 
unit to them by about that time last November. However, the 
Lottery had not finished deciding what they wanted on the key 
pad to be configured, which is key to how the system's supposed 
to be programmed, and assembled, and everything else. So, it 
wasn't possible for them to produce even a test unit by that 
time. 



37 

Because of these kinds of delays, the final deadline 
was extended and extended finally until early April, early last 
month. And even at that point, when they submitted the units 
for testing, the Lottery hadn't set up any way of testing them. 
They hadn ' t had any experts or anybody there to proceed with 
that. 

I don't know the Commissioner personally. What I've 
just seen is a pattern of chaos and little leadership. 

This was a huge contract. I mean, this was a $150 
million contract over five years, from what I understand. And 
not to mention what it does for little people like me, I mean, 
this was a half million dollars of business we were supposed to 
get over the next five years, and that's a big chunk for our 
little company. 

I understand there were other vendors who had 
employed up to 100 people for one, and several in others, who 
are now laid off and fired, and — or laid off because the 
contract is cancelled. Plus the millions of dollars of revenue 
that's lost from the immediate Sacramento marketplace. 

In the present Commission, I also understand there 
seems to be a pattern of rubber-stamping the Director's wishes. 
Now, I know that, you know, I wanted to know if Mr. Apodaca had 
questioned the Director when -- let me back up for a second. 

At the time when — last month, the Director evoked a 
special meeting of the Commissioners which was handled in 
secrecy, from what I understand, which from what I've also been 
told has never happened before. The Director wanted the High 



38 

Integrity Systems' contract cancelled. And the Commission had 
— the Commissioners had approved it, and I guess given — 
handed a letter to one of the High Integrity Systems people just 
to indicate that they decided to terminate that contract just 
about ten minutes before the public hearing. So, most of the 
employees of High Integrity Systems found out that they were 
potentially out of a job at a public hearing. 

You know, what I would just be curious to see is, 
does the Commission, I mean, do they consider the fact that all 
these jobs are at stake? The fact that did he ask has the 
product even been tested? They hadn't had a system for even 
testing it. How can you say the thing doesn't work and reject 
the contract if you haven't even had a chance to look at it? 

And I really don't have anything else to add, except 
that my frustration of the fact that we worked very hard for a 
long time, and I worked with several people who just see an 
endless loop of no answers, no specific clear direction, 
frustration, setbacks, and lack of cooperation to fulfill a 
contract which had been established, and then no clear specific 
reason that I've really seen to my satisfaction for canceling 
that contract. 

CHAIRMAN ROBERTI: Thank you, Mr. Davis. 

Do you want to respond, Mr. Apodaca? 

MR. APODACA: Which question? 

I, of course, am familiar with the -- 

CHAIRMAN ROBERTI: Respond, I guess, to Mr. Davis' 
general frustrations at the modus operandi. 



39 

MR. APODACA: Well, being a small businessman myself, 
I certainly do sympathize with your frustration and your concern 
over this thing, Mr. Davis. 

The High Integrity contract was in place for a number 
of months, and I do know that the -- although I'm not involved 
in the day-to-day operations of the Lottery, I do know that 
everything was done on the part of the Lottery to help High 
Integrity to complete this contract. And basically, they didn't 
come through. 

MR. DAVIS: Did they get those final units to you on 
the deadline that was finally established in April for testing, 
and did you have ; people there to test it, and did you test the 
products? 

MR. APODACA: I understand that they were delivered, 
and I understand that the Lottery's technical people did test 
their product. And I understand that they did not pass the 
test. 

MR. DAVIS: You had technicians that tested it? 

MR. APODACA: That's what I've been told. 

MR. DAVIS: That goes contrary to what I've heard 
from several sources — 

MR. APODACA: At the meeting — 

MR. DAVIS: — including some of the investigators. 

MR. APODACA: At the meeting that you referred to, it 
was not a secret meeting per se. It was a closed meeting, and 
it was certainly not in violation of any law. The law allows 
this type of meeting to be held by commissions if the subject of 



40 

the meeting is litigation. 

MR. DAVIS: Had one of those ever been done before? 

MR. APODACA: Yes, four times. 

MR. DAVIS: Really. Why was this one chosen to be 
done that way? 

MR. APODACA: Well, obviously, you don't air your 
facts concerning a major contract like this and a decision to 
cancel the contract, and in fact, the decision to lodge a 
lawsuit, in public. It's just not prudent to do so. 

MR. DAVIS: Were there provisions in the contract for 
handling disputes? Were they allowed opportunity to correct 
anything you felt was dissatisfactory in the product? 

MR. APODACA: I would think so. 

MR. DAVIS: Anyway, those are my observations. I 
don't want to force you to say anything you're not free to if 
it's under litigation right now. 

CHAIRMAN ROBERTI: Thank you very much, Mr. Davis. 

MR. DAVIS: Thank you. 

CHAIRMAN ROBERTI: We have one other witness, I 
believe. 

MR. PEREZ: Mr. Chairman, Members of the Committee, 
my name's Adrian Perez, and I am Vice President of the Capitol 
Cities Chapter of the Personnel Management Association of Aztlan 
whose membership includes public and private Hispanic 
professional employees, business owners, and educators. 

We believe Mr. Daniel Apodaca is eminently qualified 
to be a member of the California State Lottery Commission. 



41 

Therefore, we urge you to vote to confirm Mr. Apodaca. 

I have here letters which state our position for each 
of you to consider. 

Thank you for allowing us the time to state our 
support for Mr. Apodaca. 

CHAIRMAN ROBERTI: Is there anyone else here who 
would like to testify on this appointment? 

Then do I hear a motion? 

SENATOR AYALA: Mr. Chairman, I move that Mr. Apodaca 
be confirmed as a member of the Lottery Commission. 

CHAIRMAN ROBERTI: Senator Ayala moves that Mr. 
Apodaca ' s confirmation be recommended to the Floor. 

Is there any discussion or debate? Any opposition? 

Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 
Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

We have four votes . Senator Petris may want to be 
recorded, so we'll go into executive session and then we'll go 
back to open session in order to record Senator Petris' vote, if 
he's here, or just to announce the vote. 



42 

This will be taken up on the Floor tomorrow because 
that's Mr. Apodaca ' s last day. We call it the "drop dead" day, 
Mr. Apodaca. 

MR. APODACA: Thank you, Senator, gentlemen, ladies. 
CHAIRMAN ROBERTI: Senator Petris is not coming back 
so we will announce the vote on Mr. Apodaca. 

The vote is four to zero; confirmation is recommended 
to the Floor. 

[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
4:20 P.M. ] 

— 00O00 — 



43 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand 



this /O^ 



% 



day of May, 1993. 




Shorthand Reporter 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 19, 1993 
2:05 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 
MEMBERS PRESENT 
SENATOR DAVID ROBERTI , Chair 
SENATOR WILLIAM CRAVEN, Vice Chair 
SENATOR RUBEN AYALA 
SENATOR ROBERT BEVERLY 
SENATOR NICHOLAS PETRIS 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

GEORGE W. FENIMORE, Member 
Teachers ' Retirement Board 

ROBERT P. MARTINEZ, Director 
Department of Aging 



Ill 



INDEX 



Page 



Proceedings 1 

Governor ' s Appointees t 

GEORGE W. FENIMORE, Member 

Teachers ' Retirement Board 1 

Background and Experience 1 

Motion to Confirm 2 

Committee Action 2 

ROBERT P. MARTINEZ, Director 

Department of Aging 2 

Background and Experience 3 

Questions by CHAIRMAN ROBERTI re: 

Proposals Regarding Interstate 

Funding Formula and Final Solution 4 

Governor's Proposals for Cutbacks in 

Services for the Aging 6 

Advocacy Position 6 

Contingency Plans 6 

Questions by SENATOR AYALA re: 

Evolution from Communications /Broadcast 

Journalism into Problems of Aging 7 

Involvement with Senior Gleaners 

Motion to Confirm 8 

Committee Action 8 

Termination of Proceedings 8 

Certificate of Reporter 9 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00-- 

CHAIRMAN ROBERTI : Let ' s go to Governor ' s 
appointments, Mr. George W. Fenimore, Member of the Teachers' 
Retirement Board. 

Mr. Fenimore, we'll ask you what we ask all the 
Governor's appointees, and that is why you feel you're qualified 
to assume this position. 

MR. FENIMORE: Good afternoon, gentlemen. 

Why am I qualified? I have a long business 
background involving investments, on the one hand. On the other 
hand, I have been involved in education for the last 25 years, 
chairing the Education Committee of the Beverly Hills Chamber of 
Commerce, where we have about ten different programs involving 
helping to educate children, including the American Presidential 
Classroom which sends five children to Washington to learn about 
government. Another, a career internship program where we put 
150 children out in the business and professions, and that has 
affected their careers. 

In addition to that, I have been recognized, I may 
say, by the California Teachers Association last week with a 
State Globe Award. Those are a few things, sir. 

CHAIRMAN ROBERTI: Thank you very much. 

Any discussion or debate? Any questions of 
Mr. Fenimore? No questions of Mr. Fenimore. 

I don't think I have any, either. I think we're 
going to let you off easy, Mr. Fenimore. 

Is there any opposition in the audience? 



Do I hear a motion? 

SENATOR PETRIS: Move. 

CHAIRMAN ROBERTI: Senator Petris moves confirmation 
be recommended to the Floor. 

Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 
Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 
Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

The vote is three to zero; confirmation's recommended 
to the Floor. 

Congratulations . 

MR. FENIMORE: Thank you very much. I consider it an 
honor to be a member of the State Teachers' Retirement Board, 
and I appreciate your confidence. Thank you. 

CHAIRMAN ROBERTI : We look forward to working with 
you. 

Now, we've had a request to put Mr. Martinez over, 
but we've put Mr. Martinez over how many times now? At least 
three times, so I think that's enough already. 

So, why don't you come forward, Robert P. Martinez, 
Director of the Department of Aging, and we'll ask you what your 
qualifications are for this position. 

MR. MARTINEZ: Thank you, Mr. Chairman, Members. 



I've been involved with state government at the 
policy level since the mid-70s, most recently as the director of 
a department that administers federal dollars targeted 
specifically for those most at risk, most needy, through a 
network of community-based organizations. Primarily I've done 
that over the last eight years through the leadership as 
Director of the Department of Economic Opportunity. 

Most recently, I've been, obviously, involved with 
another network, and that network is the Area Agency -- Agencies 
on Aging. I believe that my background has made me very 
qualified to serve in this capacity, not only — not only to 
administer these programs, but hopefully to bring together 
organizations that have not been given the opportunity or had 
the right kind of a forum to work together. We're talking about 
organizations that serve the needs of seniors at the local level 
in an effort to try to maintain their independence through 
providing nutrition programs, adult day health care services, 
intergenerational programs that help both the needs of seniors 
as well as the needs of the young at risk, and a number of 
programs that seek to maintain the dignity of the individual by 
maintaining their independence. 

We think that we — we're very excited by the number 
of initiatives that we are spearheading, and obviously I hope to 
be able to continue in those initiatives in the future. 

CHAIRMAN ROBERTI: Some Legislators have contacted me 
recently concerned about the actions of your department 
regarding the interstate funding formula and what the final 
solution on that is going to be. So, it is a current issue. 



MR. MARTINEZ: Yes. 

CHAIRMAN ROBERTI: I would like to to know what your 
proposals are for this and where you're moving. 

MR. MARTINEZ: Yes. 

We have been working very closely with both the Area 
Agencies and legislative leadership, specifically -- 
Legislature's leadership — specifically the leadership and 
guidance of Senator Mello as well as Assemblyman Costa. And in 
that process, we've been trying to create forums where 
everyone's input is taken, is allowed to be aired, and in that 
context we have been working, trying to facilitate a narrowing 
of the issues. We have been successful. 

This has been a process that has been slow and 
painful, but it has been productive. We've been successful in 
identifying areas of agreement, factors that need to be in the 
formula, weighting versus percentages, taking a look at the fact 
that the federal courts have dealt with this issue. 

The Federal Administration on Aging is — has changed 
from a review to a review and approval mode, and so we're 
waiting for guidance from them. 

All of that has given us impetus to try and see if we 
can coalesce issues, and that is what we are now doing. 

We sent out a survey this week to try to reaffirm 
where we thought we were the last time the Area Agencies got 
together, and where we were in terms of the meetings with the 
task force that's working very closely with Senator Mello and 
Assemblyman Costa. In retrospect, we probably asked too much, 
but a number of questions have been asked of us, and so we tried 



to use the survey as a forum to try and get as much input as 
possible for next week's meeting. We continue to seek that 
input. Next week's meeting is one more continuum in the process 
of trying to come up with an ultimate consensus which we, then, 
will compare with where we are right now. 

So, I cannot speak to where the Administration 
ultimately will be, but I in no way am attempting to arbitrarily 
narrow the choices. I'm trying to be as facilitative as 
possible, and we have in no way made a final decision. We have 
absolutely not. 

And so, we'll continue with this process. We look 
forward to meeting with the Area Agencies next week and just 
continue this process. 

CHAIRMAN ROBERTI: Very good. 

Are there any other questions of Mr. Martinez? 

MR. MARTINEZ: Senator, I might add, since I'm here, 
one benefit that I've had is, you know, oftentimes we are put in 
challenging positions, but this position not only has been 
challenging, but it has been personally very gratifying 
primarily because of the opportunity of working with such 
dedicated support organizations in the local communities . That 
for me has been a very personally satisfying opportunity, 
working with nutrition programs, adult day health care programs, 
Alzheimer's programs, and also the other affiliated 
organizations like the Senior Gleaners here in Sacramento, and 
the area Councils on Aging, as well as the area Commissions on 
Aging. I'm very appreciative of that. 

CHAIRMAN ROBERTI : A number of the Governor ' s 



proposals -- and we recognize the need to balance the budget -- 
however, deal with cutbacks in services for the aging. The list 
seems to be endless: incontinent supplies for the elderly, 
Alzheimer's service centers. 

I guess I have two questions. What's your advocacy 
position within the Administration on this, and also if we do 
have to cut back, do you have contingency plans? 

MR. MARTINEZ: First of all, my advocacy position 
remains very clear, and I continue to speak for our programs as 
vital and -- and absolutely necessary programs. 

This is what we presented at the time that we were 
putting together the galleys and putting together the budget. 
And as — and the Governor made a commitment in our programs and 
did not present in his budget any cuts in our programs . And we 
-- this is something that we have made very clear to the Area 
Agencies, that in a time when General Funds are scarce at best, 
that the Governor has made a commitment to continue to fund 
these programs . 

And we'll — for my part, I'm continuing to look at 
the potential of other ways to work with other departments in 
the Health and Welfare Agency to better serve the needs of our 
senior population, and I believe that there can be better ways 
to serve those populations by working in better collaboration 
with Health Services and Mental Health as well as some of the 
other departments . 

CHAIRMAN ROBERTI: Senator Ayala. 

SENATOR AYALA: This question is more of a personal 
nature than anything else. 



You're a relatively young fellow. Your degree is in 
Communications /Broadcast Journalism. 

MR. MARTINEZ: Yes. 

SENATOR AYALA: And you evolved into the problems of 
the aging, interesting. 

MR. MARTINEZ: I believe that I evolved into this 
because of the fact that I've had extensive experience in 
working with community-based organizations. In fact, Senator, 
for the last eight years in some -- in a lesser degree, I've 
already been working with a number of organizations, 
municipalities as well as private nonprofits, that do already 
serve the needs of the senior populations in our various 
communities . 

So, it became something that I was aware of and 
developed a keener interest in. And so, when the -- when the 
opportunity presented itself and I was asked to consider this -- 
this particular position, I saw it as something that was very 
much something that I personally wanted to do. 

I've always — I've been involved with the Senior 
Gleaners privately for the last eight or nine years as a member 
of their Advisory Board. The work that they do with their 2,000 
volunteers, day in and day out, in gathering food for 
distribution by some 90 local agencies here in the Sacramento 
area, to me is something that I think too many people don't know 
about, but I don't know where we would be without that kind of 
commitment by those seniors . 

But it's a two-way street. There are untold stories 
about how the personal, individual pride of those seniors has 



8 

been enhanced by knowing that they're contributing to their 
community. And I think it's that kind of awareness of what it 
is -- the vital resources of our seniors that kind of steered me 
in this direction, and hopefully there's been an acknowledgment 
by the communities . 

SENATOR AYALA: Thank you. 

CHAIRMAN ROBERTI : Any further discussion? 

SENATOR AYALA: I'll move. 

CHAIRMAN ROBERTI: Senator Ayala moves — 

SENATOR AYALA: I'll move that Mr. Martinez be 
confirmed as Director of the Department of Aging. 

CHAIRMAN ROBERTI: — that Mr. Martinez be confirmed 
as Director of the Department of Aging. 

Any opposition? Last chance. 

Seeing none, Secretary, call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 
Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 
Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

The vote is three to zero; confirmation is 
recommended to the Floor. 

Congratulations . 

MR. MARTINEZ: Thank you, Senator. 

[Thereupon this portion of the 

Senate Rules Committee hearing 
was terminated at approximately 
2:40 P.M. ] 

--00O00 — 



CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

* IN WITNESS WHEREOF, I have hereunto set my hand 
this C*-- & day of May, 1993. 




EVELYN J. /MIZAK 
Shorthand Reporter 



228-R 

Additional copies of this publication may be purchased for $3.00 per copy 
plus 7.75% California sales tax. 

Senate Publications 

11 00 J Street, Room B- 15 

Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Senate Publication Number 228-R when ordering. 



)0O 

In 






HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUW >£PT. 

JUN 2 4 1993 



SAMFHAt 
PUBLIC UBHAOT 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 26, 1993 
1:55 P.M. 



229-R 



Reported by: 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 26, 1993 
1:55 P.M. 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR DAVID ROBERTI, Chair 

SENATOR WILLIAM CRAVEN, Vice Chair 

SENATOR RUBEN AYALA 

SENATOR ROBERT BEVERLY 

MEMBERS ABSENT 

SENATOR NICHOLAS PETRIS 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

CHARLES R. IMBRECHT, Member 

State Energy Resources Conservation and 

Development Commission 

SENATOR HERSCHEL ROSENTHAL 

SENATOR QUENTIN KOPP 

JAMES C. WATSON, Member 
California Horse Racing Board 



Ill 

INDEX 

Page 

Proceedings 1 

Governor ' s Appointees : 

CHARLES R. IMBRECHT, Member 

State Energy Resources Conservation and 

Development Commission 1 

Statement of Support by SENATOR HERSCHEL ROSENTHAL . 1 

Statement of Support by SENATOR QUENTIN KOPP .... 1 

Motion to Confirm 2 

Committee Action 2 

JAMES C. WATSON, Member 

California Horse Racing Board 3 

Background and Experience 3 

Questions by SENATOR AYALA re: 

Increase in Betting Revenues through 

Satellite Wagering 4 

Increase in Revenue with Night Racing 4 

Motion to Confirm 5 

Statement by CHAIRMAN ROBERTI on Abstaining Vote . . 5 

Committee Action 6 

Termination of Proceedings 6 

Certificate of Reporter 7 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN ROBERTI: Mr. Imbrecht, please come forward. 
Senator Rosenthal is here. 

SENATOR ROSENTHAL: My remarks will be very brief. 

I have to tell you that as the Chairman of the Energy 
and Public Utilities Committee, I've found Chuck Imbrecht to be 
a good candidate for renomination. We've worked well together 
even on difficult issues. 

I understand that there ' s going to be a 
recommendation for reorganization in the Energy Commission. I 
can think no one better able to do that than Mr. Imbrecht. And 
I'm hoping that when the decision is made about how to 
reorganize, that my bill might very well be used that's moving 
along to bring about that reorganization. 

But I think he ' s a fine gentleman. 

CHAIRMAN ROBERTI: Thank you, good recommendation. 

Senator Kopp. 

SENATOR KOPP: May I be heard, Mr. Chairman. 

It's fortuitous that Mr. Imbrecht ' s nomination is 
before the Committee today, and I'm pleased to associate myself 
with Senator Rosenthal and all others who respect and admire 
Mr. Imbrecht. 

I have known him superficially since he was an 
Assemblyman, but I've known him more intimately as a Member of 
the Senate and since he became Chairman of the Energy 
Commission. 

I've had the pleasure of being involved in some 



policy transactions, and discussions, and activities in which he 
has displayed just an extraordinary regard for people, unlike so 
many administrative officials of the genre which I think Senator 
Torres characterizes as "burrocrats " . Mr. Imbrecht is a happy 
antidote to that kind of characterization. 

I would urge Committee approval of a man whose work 
and whose impeccable conscientiousness is well known to the 
Members of the Committee, probably better than it is even to me. 

Thank you. 

CHAIRMAN ROBERTI: Thank you, Senator. 

MR. IMBRECHT: The defense rests. 

CHAIRMAN ROBERTI: I think you can rest on that. I 
think everybody has followed your work fairly closely and is 
very happy with it. 

Do I hear a motion? 

SENATOR BEVERLY: Move. 

CHAIRMAN ROBERTI : Senator Beverly moves . 

Any opposition in the audience? 

Secretary, call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 
Senator Craven. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

The vote's three to nothing; confirmation is 
recommended to the Floor. 



MR. IMBRECHT: Thank you, Mr. Chairman. I know when 
to quit. Thank you very much. 

CHAIRMAN ROBERTI : We're going to take a five minute 
recess . 

[Thereupon a brief recess was taken. ] 

SENATOR CRAVEN: We'll take up Mr. Watson. 

Mr. Watson, we'll ask you, as we ask each of the 
nominees, why you feel you're qualified for this position? 

MR. WATSON: Thank you, Senator. 

I've — for a couple of reasons, I suppose, I've been 
in and around the periphery of this industry for sometime with 
no direct involvement in horse ownership or race track 
operation, but rather indirectly through some business 
interests . 

I think I understand the different factions, 
different groups, within the industry that need to operate 
compatibly, perhaps more compatibly in the future. 

Secondly, I have a strong business background, and 
this is an industry that faces some grave problems and issues 
today that need to be addressed. I think, perhaps, they are 
more business issues than they are fundamental horse racing 
issues, and that is the revenues and attendance are declining, 
and something has to be done about that from both a marketing 
point of view and a technological point of view. 

I suppose lastly, I have the time and the interest to 
make this commitment. 

SENATOR CRAVEN: Very well. 

Senator Ayala. 



SENATOR AYALA: I'd like to ask if there's been an 
additional increase of bettors throughout California, has it 
increased by satellite wagering in all parts of the state, and 
especially in my district, has that satellite wagering increased 
extra activity? 

MR. WATSON: Yes, if I understood the question. 

Off-track satellite wagering and increased the 
aggregate of dollars waged but has decreased on-track 
attendance. So, in the aggregate it's been helpful, but for 
on-track it's probably been damaging. 

However, I do believe that that is the future. That 
is one of the turn-around elements of this industry, and that is 
to pursue other markets and more broadly attempt to attract a 
new patron base through more satellite and off -track wagering. 

SENATOR AYALA: We now have night racing for harness 
and quarter horses. Has that increased revenues, by holding 
races at night? 

MR. WATSON: Well, my first monthly board meeting was 
the month that Hollywood Park applied for their Friday 
thoroughbred racing meet, and personally, I think that night 
racing is yet another way to attract a new patron base. I think 
— and the answer is, it has positively impacted the industry. 

Hollywood Park is conducting Friday night 
thoroughbred racing, and it has had very positive results, and 
the concept there is, there are potential race track patrons 
that are unavailable during business hours but that are 
interested in attending at night as a form of entertainment. 

So, I think night racing is good for the industry and 



should be pursued. 

SENATOR AYALA: Thank you. 

SENATOR CRAVEN: Senator Beverly? 

SENATOR BEVERLY: No questions. 

SENATOR CRAVEN: Is there anyone in the audience who 
wishes to speak in favor or in opposition of the candidate? 

There appears to be none . 

SENATOR BEVERLY: Move we recommend confirmation. 

SENATOR CRAVEN: Senator Beverly moves. 

Call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 
Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

Three to zero . 

SENATOR CRAVEN: Let's keep the roll open. 

MR. WATSON: Thank you very much. 

CHAIRMAN ROBERTI: Senator Craven moves that the call 
be lifted. 

If I might explain my abstention on the matter, I do 
not want to cast a vote in opposition to Mr. Watson this 
afternoon, and we do have to process this appointment. 

However, I reserve judgment on the Floor. I am a 
little bit concerned about the problems Ms. Ferraro faced in 



whistle-blowing in the whole issue of the doping question at the 
Horse Race Board. Her feeling is that some people want to 
eliminate her position. 

I just don't think that's the kind of thing that we, 
even if we had three hours — it would be "he said-she said" 
kind of situation. But I think I'm going to let this nomination 
percolate on the Floor a little bit, and if we get any more 
information that there was any pressure — and I'm not saying 
there was — on Ms. Ferraro, or an attempt to have her not 
appointed because she was the whistle blower, then I would ask 
for the nomination to be returned to the Committee. 

I don't have that kind of information now, and I 
would hate to get into a "he said-she said" kind of situation, 
which sheds no light, because I think that's just where we are 
as far as any information we have. 

So, Secretary call the absentees. 

SECRETARY WEBB: Senator Petris . Senator Roberti. 
CHAIRMAN ROBERTI: The vote is three to nothing; 
confirmation is recommended to the Floor. 

[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
2:30 P.M. ] 

— 00O00 — 



CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
verbatim in shorthand by me, Evelyn Mizak, and thereafter 
transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

.j> IN WITNESS WHEREOF, I have hereunto set my hand 
this ^ f day of May, 1993. 




EVELYN^J. MPZAK 
Shorthand Reporter 



229-R 

Additional copies of this publication may be purchased for $3.00 per copy 
plus 7.75% California sales tax. 

Senate Publications 

11 00 J Street, Room B-1 5 

Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Senate Publication Number 229-R when ordering. 






HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUM iEPT. 

UN 24 1993 



SAM F RAf 
PUBLIC LIBRARY 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, JUNE 2, 1993 
1:55 P.M. 



230-F 



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SACRAMENTO, CALIFORNIA 



WEDNESDAY, JUNE 2, 1993 
1:55 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



.:.- 



11 



APPEARANCES 
MEMBERS PRESENT 
SENATOR DAVID ROBERTI, Chair 
SENATOR WILLIAM CRAVEN, Vice Chair 
SENATOR RUBEN AYALA 
SENATOR ROBERT BEVERLY 
SENATOR NICHOLAS PETRIS 

STAFF PRESENT 
CLIFF BERG, Executive Officer 
PAT WEBB, Committee Secretary 
RICK ROLLENS, Consultant on Bill Referrals 
NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

RAY T. BLAIR, Member 

Alcoholic Beverage Control Appeals Board 

ED DAVIS, Member 

Alcoholic Beverage Control Appeals Board 

JOHN B. TSU, Member 

Alcoholic Beverage Control Appeals Board 

SENATOR WADIE DEDDEH 

CAROL HENRY, Ph.D., Director 

Office of Environmental Health Hazard Assessment 

California Environmental Protection Agency 

SENATOR CHUCK CALDERON 

KEN WISEMAN 
Klein-Wegis Law Firm 
Bakersfield 

DORSEY HOLLAND 

Southbay Anglers For Environmental Rights (SAFER) 



Ill 



APPEARANCES (Continued^ 

WENDALL CHIN, Field Organizer 
Citizens for a Better Environment 

KALON WOFFORD 

Southbay Anglers For Environmental Rights (SAFER) 



IV 



INDEX 



Proceedings 

Governor ' s Appointees ; 



Members of the Alcoholic Beverage Control Appeals Board 
(All Taken Together) 

Statement in Support of BLAIR Confirmation 

by SENATOR WADIE DEDDEH , 



ED DAVIS 

Background and Experience 
JOHN B. TSU 

Background and Experience 
RAY T. BLAIR 

Background and Experience 
Questions by CHAIRMAN ROBERTI re: 



Proliferation of Liquor Licenses in 
Minority Areas , 



Questions by SENATOR AYALA re: 

Status of Liquor License after Business 
Is Destroyed by Rioting 



Permission Needed to Move to Different 
Location 



Motion to Confirm All Three Appointees 
Committee Action 



CAROL HENRY, Ph.D., Director 

Office of Environmental Health Hazard Assessment 

California Environmental Protection Agency . . . 



Introduction and Statement in Support by 
SENATOR CHUCK CALDERON 



Background and Experience 



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INDEX (Continued) 

Questions by SENATOR AYALA re: 

Willingness to Work with Minority and Immigrant 
Fishing Community 16 

Assurance that Fish Advisory Will Be 

Posted in Appropriate Languages 16 

Responsibility for Posting of Fish 

Advisories 17 

Testing of Fish Commonly Caught and Consumed 

in Bay/Delta Region 18 

Questions by CHAIRMAN ROBERTI re: 

Charge that Prop. 65 Science Advisory Panel 

Is Not Independent 19 

Number of Chemicals Initially Listed ... 19 

Attempt to Reconfigure Science Advisory Board . 20 

Opinion on Suggestion to Specifically State 

Chemical Involved when Posting under Prop. 65 21 

Repeal of Regulation Exempting Food, Drugs, 
Cosmetics, and Medical Devices Meeting Federal 
Safety Standards 22 

Adequacy of Current Regulatory Standards for 
Allowable Exposures to Toxics 23 

Witness in Support: 

KEN WISEMAN, Former Undersecretary 

Cal-EPA 

Bakersfield 24 

Witnesses with Concerns: 

DORSEY HOLLAND 

SAFER 25 

WENDALL CHIN, Field Organizer 

Citizens for a Better Environment 26 

KALON WOFFORD 

SAFER 28 



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VI 

INDEX (Continued) 

Response by DR. HENRY 31 

Questions by SENATOR CRAVEN re: 

Evidence of Problems Due to Consumption 

of Contaminated Fish 31 

Number of Languages Spoken among Fishermen 

in San Francisco 32 

Responsibility for Posting of Fish Advisories . 33 

Motion to Confirm 34 

Committee Action 35 

Termination of Proceedings 35 

Certificate of Reporter 36 



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P-R-O-C-E-E-D-I-N-G-S 
--ooOoo — 

CHAIRMAN ROBERTI: We have on our agenda this 
afternoon the confirmation of the Governor's appointments to the 
Alcoholic Beverage Control Appeals Board, and they are, in 
alphabetical order: Mr. Ray T. Blair, Member of the Alcoholic 
Beverage Control Appeals Board; former Senator Ed Davis, Member 
of the Alcoholic Beverage Control Appeals Board; and John B. 
Tsu, Member of the Alcoholic Beverage Control Appeals Board. 

Why don't we take all three up at the same time, and 
Senator Deddeh would like to come forward as well. So, Senator 
Davis, Mr. Blair and Dr. Tsu, why don't you come on up, too. 

Senator Deddeh would like to speak to behalf of one 
of the appointments, maybe all three. 

SENATOR DEDDEH: Maybe. 

Mr. Chairman and Members, I wish I knew enough about 
Dr. Tsu, I would say the same things. 

I don ' t think Senator Davis needs any support from 
any one of us . He's one of us, and he always will be as a State 
Senator. I need not tell you that he is probably one of the 
best gentlemen with whom I had the privilege of serving, and I 
know that he will have a very favorable recommendation from this 
Committee . 

I am here officially, Mr. Chairman, on behalf of Ray 
Blair. And I'm not here just because he happens to be a San 
Diegan. I do not come and testify on their behalf. 

I am here because I know this man. He served the 
City of San Diego very well under two mayors. In our system of 



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city government, it's a managerial system, and he ran that city 
in a very professional manner. I've heard complaints about 
members of the City Council, and his predecessors, his 
successors, but I have yet — and I have lived in the City of 
San Diego in that area 34 years — I have yet to hear any type 
of criticism of this man's management. 

And so, I am here to lend him my support and to tell 
you, Mr. Chairman, that he will be a perfect addition to the 
Appeals Control Board of Alcoholic Beverages Control. And that 
is really my recommendation. 

As you know, we're so busy and I've got to go and 
testify before another committee. 

CHAIRMAN ROBERTI: Thank you very much, Senator. We 
appreciate your coming. 

We ' re going to ask the appointees why they feel 
they're qualified to assume this position. 

Senator Davis we know so very well. I'm almost 
embarrassed to ask you the question, but for the sake of 
formality, Senator, why don't we start with you, and you can be 
very brief. 

SENATOR DAVIS: I didn't learn that in the Senate. 

[Laughter. ] 

CHAIRMAN ROBERTI: No, I know that. None of us have. 

SENATOR DAVIS: Well, when you really examine what 
you're qualified for, no one's totally qualified for anything, 
including the Presidency. 

But I think probably, having been a police officer 
for 37 years, and seeing the enforcement side, and seeing vice 



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and so forth, that that's a recommendation. 

Then sitting in the Senate for 12 years, listening 
with big ears as Vice Chairman of the Senate Judiciary Committee 
to all kinds of people with problems, and looking at all sides 
— and I had to look at all sides, because the Democrats were in 
the majority — and I think those two things would say that I 
wouldn't be going in there as a babe in the woods, and I think I 
can do the job. 

I would appreciate your confidence in me. 

CHAIRMAN ROBERTI: Thank you very much, Senator. 

Dr. Tsu. 

DR. TSU: Thank you, Senator. 

I feel I'm qualified for the Board because my 
background of law, I was a student of law; have been supporting 
the doctrine of fairness, justice and equal treatment by law. 

I think when the Board has me to serve the Board as a 
member, it makes the party feel that there's justice, fairness, 
equal treatment exists there in the Board. 

And then I see a large number of minority, ethnic 
minority cases involved in the Appeals Board. Being an ethnic 
minority, I'm a Chinese, there are a number of Hispanics, I 
speak a good number of other ethnic languages . There ' s Hispanic 
cases, Korean cases, Chinese cases. I think I know the 
mentality, psychology, practice of business, so make them feel 
that there exists some fairness, justice. And minority member 
on the Board make them feel comfortable, and make the Board 
really serve well. 

I appreciate the confirmation by the Senators. Thank 



you. 

CHAIRMAN ROBERTI: Thank you very much, Doctor. 

And finally, Mr. Blair. 

MR. BLAIR: Thank you very much. 

I'm a native San Diegan, a native Californian. I 
love this state. I love the city in which I have had a 
wonderful career opportunity in private enterprise as well as 
with the City of San Diego. 

I believe that the service on this Board provides me 
with an opportunity to give back to the State of California a 
little bit of some of the things that the state has given to me 
in my lifetime. 

I've had management experience. I've had police 
departments reporting to me; selected police chiefs and promoted 
people within the department to create a community-oriented 
understanding policy department. 

And I believe that the management experience, the law 
enforcement experience from a management standpoint, the 
understanding of problems of people trying to make a living to 
try to make their businesses grow and prosper are things that 
will allow me to provide good service to the state on this 
Board . 

And I am privileged to be here today. I'm also 
privileged to have been appointed by the Governor, and hope to 
serve this Board to the betterment of the state. 

CHAIRMAN ROBERTI: Thank you very much. 

A major issue in the Los Angeles area right now is 
the -- and I'm sure maybe some of our other urban areas — the 



proliferation of alcohol licenses in especially some of the 
minority areas. And it's caused a number of problems, from 
crime problems to ruptures between the ethnic communities. 

We've had different suggestions on what to do about 
it. 

Do you think that the problem can be handled 
administratively, through the mechanism of the ABC? Do you 
think further legislation is necessary? 

Some of the legislation that has been proposed even 
includes not allowing people to re-establish their license in 
areas where the business may have been destroyed. 

So, I'd like to hear your comments on that range of 
issues, because it really is a very important issue. 

SENATOR DAVIS: If I may proceed, Senator Roberti, I 
think the issue of what appears to be an over licensing, 
particularly in depressed minority communities, is complicated 
by the same things that afflict our trying to do something about 
a proliferation of billboards. 

You have a property right, and so you can't take a 
man's billboard away unless you compensate him for what that 
present and future value would be in terms of income. 

Certainly, the state is in no position to buy up. I 
think some day when prosperity returns to California, and we 
have an obscene $15 billion surplus, that you should think — 

CHAIRMAN ROBERTI: The good old days. 

SENATOR DAVIS: — you should think about retiring 
some of those licenses, because we sit and listen to the 
protestants from minority areas who have all kinds of other 



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problems, and on top of it, there's a beer bar 105 feet away 
from where they live. And there's all the people who come there 
and litter the premises. 

The other side of the argument is that they employ 
people. They pay sales tax. What impact is it going to have on 
the business climate of California? 

I think it deserves more than interim study. I think 
it deserves some real looking into by maybe the Senate Office of 
Research, if there still is a Senate Office of Research. 

CHAIRMAN ROBERTI: Yes, fragmented, but we still have 
one, right. 

SENATOR DAVIS: It's a very complicated problem. 

I think the people have a just complaint: why do you 
do this to me? But it's not as simple as just waving a magic 
wand and saying, "We're going to reduce them in half." Probably 
if we had 10% in some areas of what we have now, it would 
adequately serve the clientele. 

CHAIRMAN ROBERTI: Dr. Tsu. 

DR. TSU: Yes, Senator. 

I don't think we need a new legislation. I think the 
current legislation is sufficient. 

What we need to be done is the ABC Department to take 
a strong, firm attitude, tightening the granting of a license 
on the ground of a public, and so on, so forth. So, I think in 
that way it will serve the purpose. 

Because in the hearing today and other occasions, 
Senators and other Legislators may express their wishes, and 
the Executive Branch will hear the wishes and they will 



tightening the granting of license. 

CHAIRMAN ROBERTI: Thank you, Doctor. 

Mr. Blair. 

MR. BLAIR: Sir, I agree totally with John Tsu. I 
don't believe that there should be legislation which limits, 
puts a cap on, or whatever the right words are, the number of 
licenses per se, because that in effect is granting a right or 
an edge to the people who are holders of liquor licenses, and 
it's not the kind of thing that I would like to see happen. 

CHAIRMAN ROBERTI: Even in a given area? 

MR. BLAIR: I don't think that legislation is the way 
to get at it. 

It seems to me that the ABC and its ability to watch, 
to see if laws are being broken, to listen to the people in the 
area, and to take the steps which are applicable to those 
licensees, and to take it with a firm hand, is the way to go 
rather than to put a cap on licenses, which I just don't — 
don ' t happen to agree with . 

But I do think that in terms of new licenses, it's 
imperative that the people in the neighborhood be listened to 
and that their wishes be taken into account. And that's the way 
I ' d go about it . 

CHAIRMAN ROBERTI: So, you would set up a different 
standard, which is, I guess, very understandable, as between new 
licenses and what you do with the existing licenses. 

MR. BLAIR: Exactly. 

CHAIRMAN ROBERTI: And Senator Davis hopes one day 
we'll have enough money to start retiring some of them. 



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Senator Ayala. 

SENATOR AYALA: I have a question. 

This is regarding the problems that were caused after 
the riots in Los Angeles because of Rodney King's trial. A lot 
of businesses were — maybe this question's been asked before I 
arrived today — but a lot of the businesses had been destroyed, 
and a lot of them were liquor stores. 

Do they automatically get the license back when the 
buildings are restored, or do they have to resubmit it to you 
folks again, a liquor license? 

SENATOR DAVIS: They own as a proprietary right — 

SENATOR AYALA: I'm sorry? 

SENATOR DAVIS: They own the license. They paid for 
it. It has a certain value in dollars. 

And they can take that license, with the permission 
of ABC, to another location. And as soon as something is 
rebuilt, they could re-establish their business there. 

SENATOR AYALA: There's no problem in restoring that 
business with the original license, even though — 

SENATOR DAVIS: No, because they don't lose that. 
The license doesn't burn. The license is in your name as a 
licensee. You have a right to sell it to somebody else with the 
approval of ABC. 

Everything else could burn, but you have that 
treasure, whatever the value of that license is. And it's up to 
you, then, to put the business back together. 

SENATOR AYALA: So, they have a vested interest and 
they retain that license, although the building location was 



destroyed. When they make the repairs, they can go back in 
business with the same license? 

SENATOR DAVIS: Yes, the state is not — because of 
the laws, and I think it's in the Constitution, you have this 
right of ownership. You'd have to change the Constitution to 
change that. 

SENATOR AYALA: If you want to move that to another 
location, they'd have to come to you folks one more time? 

SENATOR DAVIS: They'd have to come not to us, 
because we're the Appeals Board. They have to come to the ABC 
Department and get the approval of the transfer. 

I might say, Mr. President, that we have some 
supporters here today, and I will introduce Bobbie. 

CHAIRMAN ROBERTI: Very good, your number one 
supporter. 

SENATOR DAVIS: Hold your hand up, Bobbie. Do you 
support me? 

[Laughter. ] 

CHAIRMAN ROBERTI: Bobbie Davis, Mrs. Davis, we're 
very glad to have you here in the Senate once again. 

MR. BLAIR: Senator, I'd like to take this 
opportunity to introduce my wife, Sue Blair, who is here with me 
today. 

CHAIRMAN ROBERTI: Mrs. Blair, it's very nice to have 
you also with us. 

DR. TSU: I didn't ask anyone to come to support me. 

[Laughter. ] 

CHAIRMAN ROBERTI: You're in real trouble, Doctor. 



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DR. TSU: But Senator Milton Marks, Senator Quentin 
Kopp, Senator Becky Morgan are all my good friends. 

CHAIRMAN ROBERTI: Is there anyone else here in 
support? Is there anyone here in opposition? 

Do I hear a motion? 

SENATOR CRAVEN: Move. 

SENATOR BEVERLY: One comment, Mr. Chairman. 

CHAIRMAN ROBERTI: Senator Beverly. 

SENATOR BEVERLY: It's nice to see younger men coming 
into government. 

[Laughter. ] 

MR. BLAIR: That's a wonderful comment. 

The other day in one of the meetings of this Board, I 
leaned over to our distinguished Chair and said, "I need to say 
something to that attorney, " who was there on behalf of his 
client . 

So the Chairman, this gentleman over here, said, 
"Wait a minute, everybody. Hold everything. The kid has 
something to say. " And he looked my way, and I looked the same 
way that he was looking, because I thought he was talking about 
a youngster, and he was talking about me. 

It's the first time I've been called "the kid" in 
probably 40 years, and boy, did I love it. 

[Laughter. ] 

SENATOR CRAVEN: I have moved. 

CHAIRMAN ROBERTI : Senator Craven moves the 
confirmations of Ray Blair, Ed Davis, and John Tsu to the 
Alcoholic Beverage Control Appeals Board. 



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Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 

SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 
Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

The vote is four to zero; the confirmations are 
recommended to the Floor. 

Thank you for coming and congratulations . 

SENATOR DAVIS: Thank you very much. 

CHAIRMAN ROBERTI: We have one more confirmation. 
Senator Calderon is here for Dr. Henry, Dr. Carol Henry, 
confirmation as Director of the Environmental Health Hazard 
Assessment, California Environmental Protection Agency. She's 
going to be introduced by Senator Chuck Calderon. 

I would also like to mention the presence of Dr. 
Timothy Henry and daughter Vicky who are in the audience . We ' re 
very glad to have you both with us today in the Senate Rules 
Committee . 

Senator Calderon. 

SENATOR CALDERON: Mr. Chairman and Members, today it 
is with great pleasure that I recommend to you for confirmation 
Dr. Carol Henry as the Director of the California Environmental 
Protection Agency's Office of Environmental Health Hazard 






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Assessment, otherwise known as OEHHA. 

Although many of us may not have had a full awareness 
of this small scientific arm of Cal-EPA until Dr. Henry recently 
came, introducing herself to us, OEHHA plays a vital role in the 
formation of state environmental protection and public health 
policy. OEHHA provides scientific, technical, and public health 
expertise in assessing the human health risks of chemicals in 
the environment. It is responsible for developing and providing 
risk managers in state and local governmental agencies with 
toxicological and medical information relevant to decisions 
involving public health. 

State agency users of such information include all 
boards and departments within Cal-EPA, as well as: the 
Department of Health Services, the Department of Food and 
Agriculture, the Office of Emergency Services, the Department of 
Fish and Game, and the Department of Justice. OEHHA also works 
for federal agencies, the scientific community, industry, and 
the general public on issues of environmental and public health 
information. 

While Dr. Henry is still new to Sacramento, she has 
already demonstrated that she is open and accessible to all 
sides of scientific debate. She will be instrumental to the 
administration and to the Legislature in interpreting the 
scientific data that is so often presented before us. She is 
willing to engage in meaningful scientific dialogue, but able to 
sort out the science from the science fiction. 

During the course of her career, Dr. Henry has 
developed and maintained excellent relationships throughout the 



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national and international scientific community. She has 
received the strong endorsement of her colleagues from academia, 
to industry, to environmental and public health protection 
agencies. Of particular importance to California, Dr. Henry's 
access to the highest levels of the federal scientific community 
will be essential to communicating and implementing the state's 
position on vital scientific and public health issues. 

Dr. Henry's diverse scientific background brings the 
multidisciplinary approach necessary for the coordination of 
Cal-EPA's risk assessment efforts and the development of sound 
and consistent scientific policy. 

I would point out also, Mr. Chairman, that I am aware 
of the issue relative to information regarding contamination of 
striped bass. Dr. Henry is an information — primarily an 
information agency, would have no jurisdiction relative to that 
issue. However, because she is the person that she is, she 
didn't want to be another noncaring, nonresponsive governmental 
agency and has been doing everything within her power to work 
with members of the Southeast Asian community and Pacific 
Islander community to try and address this issue. 

I believe this recommends her to this Committee for 
confirmation, and it is with that that I urge your unanimous 
support of Dr. Henry's confirmation. 

Thank you very much. 

CHAIRMAN ROBERTI: Thank you very much, Senator. 

Doctor, we'll ask you what we ask all the Governor's 
appointees, and that's why you feel you're qualified to assume 
this position? 



14 

DR. HENRY: Thank you very much, Senator Roberti and 
Members of the Senate Rules. 

I am very honored and pleased to be here as the 
Governor ' s appointee . 

As Senator Calderon mentioned, I've been only in 
California a short time, but the warmth and enthusiasm with 
which I've been greeted has just been overwhelming to me. 

Because the position I am being considered for is a 
scientific one, I thought I would go over very briefly what my 
scientific credentials are, and I will try and make this brief. 
Those folks who know me know that I can talk for long times, but 
I'll be brief. I'm trying to learn from the Senate, perhaps. 

I have a Bachelor's degree in Chemistry from the 
University of Minnesota; a Ph.D. in Microbiology from the 
University of Pittsburgh, and then subsequently, three 
post-doctoral fellowships: one at the Max Planck Institute in 
Tubingen, West Germany — well, Germany; one in Biology at 
Princeton University in New Jersey; and the third one is in 
Biochemistry and Cancer Research at Sloan-Kettering Institute in 
New York. 

Following my academic training, I started research at 
a contract testing lab, Microbiological Associates in Bethesda, 
Maryland, where I really learned about laboratory management and 
animal testing protocols for substances in the environment. It 
was during that time that many of the substances in the 
environment were becoming of concern, not only to me but to the 
scientific community. After some time there, it became clear 
that moving to an environmental consulting firm and looking at 



15 

the interface between science and regulatory policy would be a 
very important thing to participate in. 

After I accepted the position as Vice President at 
ICF/Clement, which is an environmental consulting firm, I 
provided technical and scientific support to the EPA during some 
of its most important environmental legislation, including: the 
Community Right-to-Know Act, 1986; the Toxics Release Inventory; 
and the Chemical Emergency Preparedness Program. 

During this time of working with the federal agencies 
in environmental regulations, one of the facts that becomes very 
striking is the lack of a focused area for research to improve 
the scientific basis for risk assessment and how we assess human 
health risks from these substances. When I was offered the 
opportunity to be the Director of the Risk Science Institute at 
the International Life Sciences Institute, I accepted with 
pleasure, because it allowed me to focus the efforts toward the 
research community, to try and fund the academic research to 
address these data gaps, and to enhance our methodology for how 
we do assess human health risks. 

While I was quite pleased with the efforts at RSI, 
when the Governor's Office called and asked if I would now 
consider assisting a public health agency, I was delighted. I 
think the multidisciplinary training that I have had over the 
past few years has — will serve me well. I think that the 
issue of trying to implement the risk assessment policies at the 
state are very critical. I think there are far more interesting 
and challenging things to do, and the interaction between the 
public health agencies and the Legislature is one of the 



16 

opportunities I look forward to engaging in. 

So, I'm very pleased to be here and would be happy to 
answer any questions. 

CHAIRMAN ROBERTI: Thank you very much, Doctor. 

Senator Ayala. 

SENATOR AYALA: Dr. Henry, after you and I visited, I 
received this letter from the Citizens for a Better Environment. 
They're not necessarily in opposition to your confirmation, but 
they had some concerns about your position regarding the Bay 
piers where a lot of people fish for their livelihood, by the 
way. And I understand that some of that fish, like the striped 
bass, may be contaminated with mercury. 

They wanted to make sure that these warnings were 
posted, alerting people to that problem. They've had a problem 
having the Environmental Protection Agency doing that. 

They had three questions that they wanted me in 
particular to ask of you. Number one, in terms of that problem 
I just raised, would you work directly with the affected 
minority and immigrant fishing communities on their health 
concerns? And I would say, of course you will. 

So, number two: would you ensure that existing San 
Francisco Bay/Delta Region Fish Health Advisory will be 
effectively communicated in appropriate language to the 
multicultural minority constituency? I understand there ' re a 
lot of folks that don't really speak the language, and they 
fish, and they're not aware that this could be a problem to 
them. A health advisory which states that women, pregnant 
women, and children should not eat striped bass caught in the 



17 

Bay, they wondered if you would state your position in terms of, 
I guess, advising these folks of some signs up there that 
they're doing it at their own risk, or something of that nature. 

Do you have any comments on that? 

DR. HENRY: Yes. This is the issue to which Senator 
Calderon also referred. 

I met with parts of this group, the SAFER, last 
Thursday and had agreed to try and facilitate some of these 
concerns for them. 

As you I might know, our agency is not responsible 
for postings. 

SENATOR AYALA: You're not responsible? 

DR. HENRY: We're not responsible for postings. 

SENATOR AYALA: Who is responsible? 

DR. HENRY: Well, I believe Fish and Game is 
responsible. 

Although, what we are actually doing as a result of 
that meeting is taking a look at some of these issues. Our 
responsibilities as for OEHHA is to provide the fish 
advisories, which we have done. The publication of those fish 
advisories is required by the Legislature to be in the 
Department of Fish and Game's fishing regulations. 

It wasn't quite clear what our total responsibility 
is in this area, but because we believe that they had some 
public health concerns, we met with them. We are trying to 
implement the action plan that we agreed to during that meeting, 
and I have every confidence that we'll move forward and try and 
facilitate this. 



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We're a very tiny agency. We are trying to address 
what issues they have raised. 

SENATOR AYALA: Perhaps the next question's also the 
responsibility of Fish and Game. 

Given your current budget, what will you do now to 
conduct testing of fish commonly caught and consumed in the San 
Francisco Bay/Delta region for contamination and health risks? 

Is that your responsibility? 

DR. HENRY: No. We have no funds for testing in San 
Francisco Bay. There are some other groups that are 
coordinating testing of certain fish. We, in fact, participated 
in a meeting earlier — earlier last week with the groups that 
are trying to do that . 

I think this may bring to the public fore, however, 
some of the concerns that fishing groups have for the quality of 
fish in the Bay. We'd be happy to assist in trying to look at 
that in any way we can. 

SENATOR AYALA: Do you think we should direct our 
concerns to Fish and Game? 

DR. HENRY: We'd be happy to try and assist and work 
with Fish and Game as well. One of the major functions of our 
office is to try and coordinate and facilitate. 

We can't possibly have enough staff to do all this, 
but we do believe we can facilitate these issues. 

SENATOR AYALA: Thank you. 

CHAIRMAN ROBERTI: Thank you, Senator. 

The Science Advisory Panel, which was set up in 1991 
pursuant to Proposition 65, identifies chemicals known to cause 



19 

cancer or reproductive harm, and it was made up of scientists 
from academia and from the private sector. After the creation 
of Cal-EPA, the Governor appointed a panel made up entirely of 
state agency scientists. 

Some people have raised the charge that the Panel is 
no longer independent and will be relatively slow in listing 
Proposition 65 chemicals. Do you believe this to be the case? 
If so, do you propose any remedies to alleviate the situation? 

DR. HENRY: Is the question, do I believe listing of 
chemicals under Prop. 65 is going to be slow? 

CHAIRMAN ROBERTI: Right, number one, and two, maybe 
because of the nature of the composition of the Panel? 

DR. HENRY: There are several ways that chemicals are 
listed under the Proposition, only one of which is through the 
Panel . 

I do believe in the future that what we like to term 
"de novo" listings will be slow because most of the chemicals 
that would be easily done have been listed. There are over 500 
chemicals on the Proposition 65 list now. 

With regard to the Panel -- 

CHAIRMAN ROBERTI: How many of those chemicals were 
initially listed in the Proposition? 

DR. HENRY: Because there are other means for listing 
the chemicals, I believe, through and authoritative body or 
regulation, I believe if you go back, there only are about five 
chemicals that would have been listed by the Panel on its own 
out of the 500. 

With regard to the composition of the present Panel 



20 

as it was put together last year, one of the first activities 
that Secretary Strock asked me to look at was scientific peer 
review in general for OEHHA, and in particular these expert 
independent scientific advice that should be part of the 
Proposition 65 issue. I've done that. We've had a number of 
internal reviews and meetings. We've also impaneled the Cabinet 
level Proposition 65 working group, which is comprised of other 
state agency heads, to give us guidance on how we should manage 
some of those issues. Within a short time, we should be 
releasing a proposal to reconfigure the Science Advisory Panel. 

I'm very committed to external independent scientific 
peer review. I think that is an absolute must in the whole 
scientific area. The panel would be comprised of outside 
scientists, and we would bring to them the issues associated 
with not only with Prop. 65, but other risk assessment issues 
that come before OEHHA. And we should be releasing that — 

CHAIRMAN ROBERTI: And the panel advises you 
directly, even though it wouldn't be the, per se, Science 
Advisory Panel that lists? 

DR. HENRY: No, in fact, one of the major efforts as 
we looked at how we would do scientific peer review was that to 
date, most of the emphasis had been on Proposition 65 issues. 
The listing issues and the no-significant-risk level issues that 
are associated with Prop. 65 had really required a lot of 
attention. 

Some other things that we really need scientific peer 
review on, there just hasn't been enough time or mechanism to 
look at that. So, that's why we're trying to reconfigure the 



21 

Science Advisory Board for OEHHA. Subcommittees would then be 
responsible for taking a look at the Prop. 65 issues. It would 
change the state's qualified experts to be OEHHA as opposed to 
an outside group. 

We are going to be distributing this proposal to the 
public. We will have a public workshop, most likely in July, 
and try and fully and openly discuss the advantages and 
disadvantages of this proposal. 

I'd be happy to send this to you, if you'd like. 

CHAIRMAN ROBERTI: Please do, yes, thank you. 

Right now in posting Prop. 65 warnings, it's only 
necessary, I guess, to post that the chemical involved would 
cause reproductive harm or possible — 

DR. HENRY: Known to the state; known to the state to 
cause cancer or reproductive harm. 

CHAIRMAN ROBERTI: Right. 

There have been some suggestions, and I'd like to 
know your opinion on them, as to stating specifically the 
chemical involved, and maybe more specific information as to the 
nature of the harm or the nature of the harm that might be 
caused. 

DR. HENRY: The issue of warning regulations under 
Prop. 65 has received a lot of attention over the past two to 
three years. OEHHA has had four public workshops, trying to 
establish regulations that would helpful and improve the quality 
of the warnings . 

It is our and my own personal opinion that the 
warnings are oftentimes not useful. I do think some revisions 



22 



are necessary. 

CHAIRMAN ROBERTI: Why is that? Because they're too 
complex? 

DR. HENRY: No, they're meaningless warnings. 

One of the proposed regulations, changes, had been to 
specify the chemical, and to do a number of these issues. 

We've been reviewing this. We are going to move, do 
something in this area, but it has been very complex. 

We're actually not required to do any warnings at 
all. We are doing this as an assistance to the regulated 
community to give some guidance and some assurities on what 
would be acceptable and what would not. 

So, this is fairly complicated. There are very 
strong feelings in this area. We are trying to have open 
discussions about it to arrive at something that will improve 
the quality of the warnings. 

CHAIRMAN ROBERTI: Regulations adopted by the 
previous administration exempting food, drugs, cosmetics, 
medical devices meeting federal safety standards from the 
requirements of Prop. 65 were recently struck down by, I think, 
the trial court. The current administration appealed the ruling 
but recently settled the case by agreeing to repeal the 
regulation on July 1 of this year. The producers of the 
products oppose, I guess, this settlement. 

What is your position? What do you see as the 
eventual outcome? 

DR. HENRY: This is -- has a long, distinguished 
history. 



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The original regulation was an interim regulation. 
It was made as a recommendation from the present — the Science 
Advisory Panel at that time to give some safe harbors for 
chemicals until such time as — I believe at the time they 
recommended 50 no significant risk levels could be adopted. 

We now have over 200 no significant risk levels, and 
so under the terms that the interim regulation was put in place, 
it was time to repeal it. 

It was never considered an exemption. It was an 
interim regulation. 

In the course of the legal activities — which, as 
you know, I'm not a lawyer — it was determined that the state 
would most likely — did not have a strong case, and the 
recommendations were therefore to settle. 

My own opinion is that very little is going to 
change. That I think that it's — that we will proceed. As 
part of the settlement agreement, we've agreed, our office has 
agreed, to establish, I think, 29 no significant risk levels for 
carcinogens . 

The interim regulations never covered reproductive 
toxicants. It was only carcinogens. So, we then tried to 
identify substances that might be of grave concern to the 
regulated community. They recommended no chemicals to us, so we 
attempted to identify them ourselves, and we'll be proceeding to 
try and meet this deadline of July 1 for the 29 chemicals. 

CHAIRMAN ROBERTI: Do you feel that California's 
regulatory standards for allowable exposures to toxic substances 
protects the health of infants, children, adequately? Are there 



24 

any areas where you would expand? 

DR. HENRY: I think the issue of protecting sensitive 
subpopulations and special groups is one we must be vigilant 
about always. I do believe that our regulatory apparatus does 
protect sensitive populations. I just think that the amount of 
information we have in that area could always be improved. 

We in California have been among the first to 
identify some of these areas to further understand exposures and 
circumstances. Children have very special circumstances. 
They're growing; their bodies are changing in ways that do not 
happen to adults . We need to take those factors into 
consideration, which I believe we do, in our programs. 

CHAIRMAN ROBERTI: Any other questions? 

Is there anyone here in support of the nomination? 
Please come forward. 

MR. WISEMAN: My name is Ken Wiseman. I currently 
manage a law firm in Bakersfield, California. Last year, I was 
the Governor's Undersecretary of Cal-EPA. 

Mr. Beverly and Mr. Craven trained me about 20 years 
ago to be brief when I was a staffer here, so I'll keep it to 
that point, other than that I was partially responsible, I 
think, for recruiting Carol Henry out here. And as one who's 
now returned to the private sector and sees the critical need 
for the kind of special talent that she has to bring industry, 
the academic community and government together, she is uniquely 
qualified. 

I've continued to be involved with her, working along 
with the academic community, with environmentals like Michael 



25 

Trainer and the like, who we continue to bring together the 
different communities and make government work and bring 
together the kind of information and talent that Carol has 
uniquely been able to do because of her common sense; not a 
scientist who has lost touch with the real world, very much in 
touch with the real world. 

I definitely encourage her confirmation. 

CHAIRMAN ROBERTI: Thank you very much. 

Anyone else? 

Is there anyone here in opposition? Is there anyone 
here who would like to just testify generally with concerns on 
the nomination? Please come forward. 

MR. HOLLAND: My name is Dorsey Holland, and I'm a 
member of SAFER, Southbay Anglers For Environmental Rights. 

We've been working with Dr. Henry about protecting 
the health and safety of the -- 

CHAIRMAN ROBERTI: Can you talk up just a little bit 
into the microphone? 

MR. HOLLAND: We've been dealing with Dr. Henry about 
protecting the health and safety of people that fish around the 
Bay areas. We're not for or against her, but we're just sort of 
concerned that she's not going to work with the community, and, 
you know, concerned that she's not going to work with the 
communities by her decisions. 

Wendall Chin of Citizens for a Better Environment 
will make it more clear for you. 

CHAIRMAN ROBERTI: Yes, thank you. 

Next witness, please give your name. 



26 

MR. CHIN: My name is Wendall Chin. I'm the field 
organizer with Citizens for a Better Environment, and the 
organizer for this specific chapter which has been working with 
Carol Henry, Dr. Carol Henry, on this concern. 

Southbay Anglers for Environmental Rights is 
comprised basically of people who fish from the piers. Right 
here we have two local anglers, people who fish on a consistent 
basis and who often go throughout the piers and know what's 
going down, right down the level, where -- where Dr. Henry's 
decisions and her agency has put this health warning out where 
people are not informed about this . 

We are supported by a lot of different greater Bay 
region community groups, as well as environmental groups, on 
this issue who have also sent in a resolution asking Fish and 
Game as well as Dr. Henry's office to work on a creative 
solution to combining resources as well as working with the 
community on addressing this concern about people consuming 
contaminated fish. 

This is a big problem because there are over a 
quarter million licensed anglers in the Bay Area alone. That 
doesn't mean on the piers. You don't even need a license to 
fish. 

Most of the people on the piers are immigrant 
background, or low-income — or from low-income backgrounds. 
Those are the ones who consume the fish at a high, 
disproportionate rate. 

Only recently has this been recognized as an issue. 
Now, one of the things that we're here about there is our 



27 

concern for this health warning, that people are not adequately 
informed in their own language, as well as — not just 
adequately informed, but also that they — they as well support 
these agencies, but yet are not getting adequate attention from 
these agencies. 

So, we have been working, trying to work with Dr. 
Henry's agency as well as Fish and Game on this. And I've 
appealed to them for assistance. 

This health warning comes in the Fish and Game Health 
Booklet and states that — I have a copy of it here for you. 
That's a copy of the actual health warning. There are two 
agencies — Fish and Game and OEHHA — who jointly put out this 
warning. This warning has been out for — since the early '70s. 
This has been admitted by both agencies that it's been out for a 
long time. Yet, when we ask if they — have they updated it, 
they say briefly in the early '80s, but not — not in any 
adequate sense and which addresses the people — the fish that 
people catch and eat. 

We have lots of families on these piers bringing home 
the fish. So, what we're talking about is an outdated health 
warning that shows that there's no evidence out there to confirm 
that it's safe out there to eat. 

And if you talk to people on the piers, we'll have 
Kalon, who fishes, has been fishing for 20 years, to give a 
really quick explanation of what he's seen. 

CHAIRMAN ROBERTI: We're going to break for five 
minutes. We'll take your testimony next, and then Doctor, you 
may respond, and then we'll take whatever other witnesses or 



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further questions there are. 

So, the Senate Rules will stand in recess for five 



minutes. 



[Thereupon a brief recess was taken.] 
CHAIRMAN ROBERTI: Senate Rules Committee will 



reconvene 



Yes, the gentleman here. We were awaiting your 
testimony. Please identify yourself. 

MR. WOFFORD: Good afternoon. Kalon Wofford. I am a 
resident of Oakland, California, and I'm on the SAFER leadership 
staff. 

As Wendall put it earlier, I have been fishing in the 
bays for over 20 years. And in those 20 years, I have caught 
almost every species of fish in the Bay. 

And with — since I am an English reading and 
speaking person, I understand the importance of the health 
warnings. But I have many friends who aren't really English 
speaking and don't really understand what these warnings are. 

I feel it ' s important that these people have a right 
to have things explained to them the way that it has been 
explained to us. 

Now, with the species of the striped bass, as far as 
the mercury warnings, or whatever, the mercury is not just the 
problem. There are other things in the bays that contaminate 
the fish. Now of recent, I'd say a good four weeks ago, I 
caught a striped bass, as well as a smelt and perch. And in 
those fish I found parasites as well as a peculiar odor. 

Now, I know of people who are not allergic to fish, 



29 

but have eaten fish from out of the Bay that have swollen up 
from some sort of contaminant, and I'm not exactly sure what. 

Now, we met with Dr. Henry, and of course, like 
Dorsey has said, that we do not — we are not — we do not 
oppose or are we for her appointment. 

But because of the during the meeting, we — we just 
felt that things didn't go as well as we had liked it to. We 
felt that we weren't listened to, and we felt that we were kind 
of brushed up under the rug without the voice of the community 
being heard. 

I think you had something else that you wanted to 
address, Wendall? 

MR. CHIN: Wendall Chin again. 

Like Kalon said, we are not for or against Dr. Henry, 
but we did — Dr. Henry has agreed to meet with us, has met with 
us, and we applaud her on that. We're glad that her agency has 
finally met with community folks. 

However, we are concerned about what her agency can 
do for us. We were told what she can't do for us, but we had 
presented to her a written format, a written set of our concerns 
laid out as to what we think the best way to approach this 
problem is. There were a couple components to it. Basically it 
was a community education — public education and community 
outreach program which has the health warning, basically, in 
pamphlets translated into the different languages of people on 
the piers posted, in communities, and also distributed to 
communities, as well as having — working with Fish and Game on 
getting training for staff, multicultural training for staff so 



30 

certain people — so people can understand what they're being 
told as well as a fish testing program. 

So, at this point, we are — we have a two week 
response and we're waiting for that response, and we are 
honoring that, honoring her word. That's why we're not for or 
against her appointment, but we are concerned that we might not 
get a response in adequate fashion. 

CHAIRMAN ROBERTI: Thank you. 

MR. WOFFORD: Also — I'm sorry, this is Kalon again. 

I'd like to go back to something about — something 
that Dr. Henry said earlier about the warnings are useless. 

DR. HENRY: That was with regard to Prop. 65, not the 
fish advisories. 

MR. WOFFORD: That's fine. I didn't understand that. 
I'm sorry. 

Also, during the meeting that — back during that 
meeting, I would like to address one other thing, where she said 
that it's better to eat fish than to not eat fish. But if you 
have — if you have a family, and you're feeding them these 
fish, and they don't know if there's a warning on them, if 
they're supposed to eat it, they're not supposed to eat it, what 
makes it better? It doesn't make it any better. It makes it to 
where it's like we don't know. And they don't know. 

So, in closing, what I would like to know is what 
Dr. Henry's agency plans to do. 

Thank you. 

CHAIRMAN ROBERTI: Thank you. 

Dr. Henry, do you want to respond? 



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DR. HENRY: Yes. 

As all three gentlemen have indicated, we did have, I 
thought, a very productive meeting where we agreed on a number 
of things we were going to do. One of the issues has to do with 
the multicultural issues associated with the fish advisories. 
We've agreed to look into this, to try and figure out how to do 
this . 

Fish and Game participated in this meeting. We also 
agreed to try and contact the local county health officers, 
since in some cases they're responsible for providing 
information to their jurisdictions. We've already started doing 
that. 

So, to the extent that we're able, I think we are 
trying to address this. 

We are quite concerned that all members of the public 
and of our communities be served. We will have limited 
resources. We are continually having limited resources. We 
could get into specifics about budgets this year, but everybody 
is having a problem that way. So, you know, to the extent that 
we are trying to work with this group and address their 
concerns, I can assure you, we are trying to do that. 

CHAIRMAN ROBERTI: Thank you very much, Doctor. 

Is there anyone else here in support, opposition, or 
concerns? 

Senator Craven. 

SENATOR CRAVEN: Thank you, Mr. Chairman. 

Doctor, is there any evidence to indicate the amount 
of problems that have befallen the citizenry there by virtue of 



32 

eating a fish that has too much mercury content in it? 

DR. HENRY: No, there is no evidence, but I think one 
of the issues is that the fish advisory for striped bass, with 
the concerns for mercury, we're not banning these fish. The 
advisory suggests how much one should eat and how frequently, so 
that one is not — I mean, after all, the issue is how much of a 
toxic material do we eat. 

So, I think the issue that they're raising here is of 
concern, but we're not banning the fish. We're just 
recommending a certain amount to be eaten. 

SENATOR CRAVEN: Well, I really don't know how you 
ban a fish. 

DR. HENRY: Well — 

SENATOR CRAVEN: How do you do that? 

DR. HENRY: We could make — I mean, I think that 
there have been recommendations that certain fish not be eaten 
under any circumstance. 

SENATOR CRAVEN: Does that ban it? You may say that 
that's not appropriate, and I would understand that, but to say 
"ban it", you can't control the personality of somebody with a 
fishing pole. That's just too much, even though you are a 
Ph.D., and other things. 

DR. HENRY: Oh, I agree with that. We have very 
little influence. 

SENATOR CRAVEN: I don't for the moment question your 
magnificent credentials, but it's just a common sense thing. 

And another thing I'd like to ask, does anybody know 
how many languages are spoken among fishermen in San Francisco? 



33 

Do any of the gentlemen who offered testimony know? 

MR. CHIN: We're asking for the main languages on the 
piers, which would be six, including English. That, in addition 
to English, Spanish, Chinese, Vietnamese, Tagalog, Laotian, and 
Korean. 

Now, this has been already done on the Dumbarton 
piers by the federal U.S. Fish and Wildlife Service. They've 
already posted six languages at these piers. 

SENATOR CRAVEN: Well, would you and those who follow 
in your organization be happy if, under the aegis of the state, 
that we would do the same thing, the posting? 

MR. CHIN: I think that's what we've been asking for 
all along. We feel that we're not asking for much. We think 
that basically we just want people informed. We want people to 
know. 

SENATOR CRAVEN: I understand. 

It's also my understanding that basically that 
posting is not under the purview of the Doctor's operation, but 
under the Fish and Game people. 

Is that not correct, Doctor? 

MR. WOFFORD: At the meeting we had on the 27th, I 
believe, of May, Fish and Game said that they didn't fall under 
that, either. 

SENATOR CRAVEN: Did they suggest anyone? 

MR. WOFFORD: They suggested, I think it was — who's 
the other — it was some other department. I can't remember. 

DR. HENRY: One of the issues here, Senator, is that 
because it wasn't clear who might do this, was one of the 



34 



reasons I tried to offer to facilitate this. 

SENATOR CRAVEN: Yes. 

DR. HENRY: And to try and do what we could. I 
didn't want a situation where another government agency is 
saying, "We can't." 

I am trying to say it might not be completely easy, 
and I'm not sure I know how to do it, but I'm trying to 
facilitate it. 

SENATOR CRAVEN: Yes. I know the bureaucratic 
environment here is not the easiest to wend your way through. 

But basically what they're asking for is really a 
very simple request; is it not? 

DR. HENRY: I'm not sure how simple it is, Senator. 
I don't know exactly how many piers, or where, or how it would 
be done. We physically don't have the ability to do that. I 
said we would try and — that ' s why I wanted to talk to the 
local county health officers. 

SENATOR CRAVEN: Yes. 

Well, I get the impression that these gentlemen and 
the persons that they represent have no quarrel with your 
candidacy for this position, but they would like to bring to 
your attention that which they have made mention of, and I'm 
sure that you will do that or probably already have. 

Mr. Chairman, if there's no further discussion, I'm 
ready to make a motion. 

CHAIRMAN ROBERTI: Senator Craven. 

SENATOR CRAVEN: I would move the confirmation of 
Dr. Henry. 



35 

CHAIRMAN ROBERTI: Senator Craven moves confirmation 
of Dr. Henry. 

Any discussion or debate? Any opposition? Hearing 
none, Secretary will call the roll. 

SECRETARY WEBB: Senator Ayala. 
SENATOR AYALA: Aye. 

SECRETARY WEBB: Ayala Aye. Senator Beverly. 
SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. Senator Petris . 
SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. Senator Craven. 
SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. Senator Roberti. 
CHAIRMAN ROBERTI: Aye. 

The vote is five to zero; confirmation is recommended 
to the Floor. 

DR. HENRY: Thank you very much. 

[Thereupon this portion of the 

Senate Rules Committee hearing 

was terminated at approximately 

3:02 P.M. ] 

--00O00 — 



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CERTIFICATE OF SHORTHAND REPORTER 



I, EVELYN J. MIZAK, a Shorthand Reporter of the 
State of California, do hereby certify: 

That I am a disinterested person herein; that 
the foregoing Senate Rules Committee hearing was reported 
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attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

,j IN WITNESS WHEREOF, I have hereunto set my hand 

this / day of June, 1993. 



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^/EVELYN'j./MIZAK 
• Shorthand Reporter 



230-R 

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